i 


m 


Between 


e 


HMJ.'MIJRPH'Y 
H:ELMBB 


SHBBERICK'  U  ACKERMA 


~~'  F^i 


it 


THE  HOUSING  FAMINE 


THE  HOUSING  FAMINE 

HOW  TO  END  IT 

A  Triangular  Debate 

BETWEEN 

JOHN  J.  MURPHY 

EDITH  ELMER  WOOD 

FREDERICK  L.  ACKERMAN 


NEW  YORK 
E.  P.  DUTTON  &  COMPANY 

681  Fifth  Avenue 


'J 


Copyright  1920,  by 
E.  P.  DUTTON  &  COMPANY 


AXL  rights  reserved 


Printed  in  the  United  States  of  America 


BIOGRAPHICAL   NOTES   ON  THE   DEBATERS 

John  J.  Murphy 

Born  in  Dublin,  Ireland,  in  1865.  Having  com- 
pleted, with  much  success,  his  high-school  course,  he 
entered  the  University,  but  family  needs  compelled 
him  to  abandon  his  studies.  He  came  to  New  York 
in  1882  and  experienced  many  of  the  hardships  of 
the  friendless  immigrant.  Here  he  came  in  contact 
with  the  housing  problem,  in  the  acute  form  in  which 
it  presents  itself  to  the  actual  tenement  dweller,  for 
in  those  days  regulation  was  unknown.  For  several 
years  he  worked  at  engraving  and  printing  for  the 
support  of  his  family,  wrote  articles  for  papers  and 
magazines  and  participated  in  several  economic  re- 
form movements,  among  others,  the  Henry  George 
campaigns.  He  became  interested  in  the  Good  Gov- 
ernment movement,  and  in  1901  was  appointed  As- 
sistant Secretary  of  the  Citizens  Union.  In  1903 
he  was  elected  Secretary  of  the  City  Committee  of 
the  Citizens  Union,  a  position  which  he  held  until 
1909.  During  these  years  he  was  active  in  the  Muni- 
cipal Art  Society,  the  Reform  Club  and  the  National 
Society  of  Craftsmen,  of  which  latter  body  he  was 
Secretary  for  two  years.    In  1909  he  was  Secretary 


442 i 69 


Vi       BIOGRAPHICAL  NOTES  ON  THE  DEBATERS 

of  the  Transit  Committee  of  the  Reform  Club  and 
directed  a  successful  campaign  for  the  exemption  of 
the  Subway  and  Dock  Bonds  from  the  computation 
of  the  city's  debt.  In  this  work  he  first  met  Judge 
Gaynor,  whom  he  induced  to  support  the  measure, 
although  previously  opposed  to  it.  On  Judge  Gay- 
nor Js  election  to  the  Mayoralty,  he  was  appointed 
Tenement  House  Commissioner,  an  office  which  he 
held  through  the  administration.  "When  Mayor 
Mitchell  was  elected,  he  retained  him  in  office.  In 
January,  1919,  the  Tenement  House  Committee  ap- 
pointed him  its  Secretary,  a  position  which  he  still 
holds. 

Edith  Elmer  Wood 

Edith  Elmer  Wood  is  the  daughter  of  the  late 
Commander  Horace  Elmer,  United  States  Navy,  and 
the  wife  of  Captain  Albert  Norton  Wood  of  the  same 
service.  These  navy  connections  account  for  her 
having  lived  at  various  times  in  Europe,  Asia  and 
the  West  Indies,  as  well  as  on  the  Atlantic,  Pacific 
and  laka  coasts  of  the  United  States. 

Mrs.  Wood  is  a  graduate  of  Smith  College  and 
of  the  New  York  School  of  Social  Work  and  holds 
the  degrees  of  Master  of  Arts  and  Doctor  of 
Philosophy  (in  Political  Science)  from  Columbia 
University. 

She  is  the  mother  of  four  sons,  one  of  whom,  the 
late  Captain  Thurston  E.  Wood,  12th  Field  Artillery, 
was  killed  in  action  during  the  World  War. 


BIOGRAPHICAL  NOTES  ON  THE  DEBATERS    vii 

She  has  always  taken  a  keen  interest  in  matters 
of  health  pnd  public  welfare.  While  her  husband 
was  stationed  on  the  island,  she  founded  the  Anti- 
Tuberculosis  League  of  Porto  Rico  and  was  for  a 
number  of  years  its  president,  during  which  time  it 
was  awarded  a  special  gold  medal  by  the  1908  Inter- 
national Congress  on  Tuberculosis  for  its  achieve- 
ments. 

Mrs.  Wood  Jias  been  a  contributor  to  various 
magazines  and  is  the  author  of  a  number  of  works 
of  fiction  and  travel,  among  which  are  The  Spirit 
of  the  Service,  a  navy  story  of  the  Spanish  War 
period,  and  An  Oberland  Chalet,  a  unique  contribu- 
tion to  the  out-of-door  literature  of  Switzerland.  She 
has  devoted  increasing  thought  of  recent  years  to 
civic  questions,  and  for  several  years  past  has  cen- 
tered her  attention  on  the  housing  problem.  An  article 
of  Constructive  Housing  Legislation  and  its  Lesson 
for  the  United  States,  which  appeared  in  The  Journal 
of  the  American  Institute  of  Architects  in  February, 
1918,  struck  a  new  note  and  attracted  much  attention. 
Her  book,  The  Housing  of  the  Unskilled  Wage  Earner 
(Macmillan,  1919),  which  The  American  Journal  of 
Sociology  ys  review  hailed  as  "the  first  thoroughly 
scientific  discussion  of  the  problem  in  the  United 
States/ '  has  been  widely  accepted  as  an  authority. 

Frederick  L.  Ackerman 

Graduate  and  Residence  Fellow,  College  of  Archi- 
tecture,  Cornell.     Sigma  Xi.     Pupil   of  Duquesne, 


viii     BIOGRAPHICAL  NOTES  ON  THE  DEBATERS 

Paris.  Sometime  Lecturer  in  Architecture  and 
Theory  of  Planning,  Cornell  and  Columbia. 

Member  of  the  State  Board  for  the  Registration 
of  Architects,  New  York  State,  1916  to  date. 

Fellow  of  the  American  Institute  of  Architects. 

Accredited  representative  of  the  American  Insti- 
tute of  Architects  and  the  Labor  Division  of  the 
Council  of  National  Defense  to  England  1917.  Pur- 
pose of  trip  to  investigate  British  War  Housing 
schemes.  Eesult  of  investigation  published  in  The 
Journal  of  the  American  Institute  of  Architects,  and 
later  issued  in  publication  entitled  What  is  a  House? 

Member  of  the  Mayor's  original  Congestion  Com- 
mittee; Committee  on  City  Planning  of  the  City 
Club,  New  York;  Committee  on  City  Planning,  the 
American  Institute  of  Architects. 

Author  of  The  New  Education  of  the  Architect 
(originally  published  in  The  Journal  of  the  American 
Institute  of  Architects),  and  a  series  of  articles  for 
The  Journal  of  the  American  Institute  of  Architects, 
entitled  Where  Goes  the  City  Planning  Movement? 

Contributor  to  various  publications  upon  subjects 
having  to  do  with  housing,  town  planning,  archi- 
tecture, etc. 


PREFACE 
By  John  J.  Murphy 

The  acutest  manifestation  of  the  social  disorganiza- 
tion due  to  the  war  which  has  yet  appeared  in  America 
is  the  housing  shortage.  No  question  of  equal  funda- 
mental importance  now  confronts  the  public.  The 
depreciation  of  housing  standards,  subtly  operating, 
is  diminishing  the  self-respect  of  thousands.  The 
lack  of  housing  is  forcing  strongly  to  the  front  the 
question  "How  far  shall  the  state  be  called  upon  to 
attempt  to  supplement  the  shortcomings  of  a  faulty 
social  system."  Many  who  have  resented  state  in- 
terference in  individual  life  are  assuming  an  atti- 
tude of  tolerance  toward  this  manifestation  of  it.  If 
the  problem  is  not  solved  otherwise,  this  sentiment 
must  grow,  for  people  must  have  houses. 

I  am  glad  to  have  had  the  opportunity  of  present- 
ing my  views  on  this  subject,  because  of  its  supreme 
importance.  I  am  glad  that  the  discussion  on  the 
other  side  has  fallen  into  hands  so  competent  to 
present  it.  Mrs.  Wood's  knowledge  of  the  subject 
will  not  be  disputed  by  any  person  familiar  with 
the  present  state  of  the  housing  problem.  I  rarely 
differ  with  her  facts.  I  only  dispute  her  conclusions 
as  to  the  best  method  of  attaining  results. 


X  PREFACE  BY  JOHN  J.   MURPHY 

Mr.  Ackerman's  experience  as  a  publicist  in  archi- 
tectural matters  is  almost  unrivaled  among  his  pro- 
fessional brethren  in  America.  He  has  seen  the 
subject  in  all  its  ramifications  at  home  and  abroad, 
and  however  strongly  I  am  forced  to  deny  that  his 
programme  can  have  that  immediate  effect  which  the 
crisis  demands,  I  am  compelled  to  recognize  the 
fundamental  nature  of  his  social  diagnosis,  and  the 
need  for  those  profound  evolutionary  changes  which 
must  occur  before  the  housing  supply  of  the  world 
can  be  set  upon  a  satisfactory  foundation  which  must 
be  based  on  the  principle — every  family  should  own 
its  home. 

As  for  the  method  of  presentation  which  is  here 
employed,  the  written  debate,  it  should  be  obvious 
that  it  has  a  great  advantage  for  the  general  public 
over  spoken  debate  or  individual  books  written  upon 
specific  aspects  of  the  subject.  The  participants  in  the 
debate  have  been  at  all  times  aware  of  the  attitude 
taken  by  their  opponents,  and  have  therefore  been  in 
a  better  position  to  reply  than  where  only  one  side 
of  the  question  is  known.  The  person  who  wishes 
seriously  to  study  the  problem  is  enabled  by  this 
method  to  refer  at  any  time  to  the  objections  urged 
whenever  he  is  not  prepared  to  accept  the  proposition 
as  formulated.  It  should  be  possible,  therefore,  for 
any  intelligent  reader  to  determine  from  a  perusal 
of  the  arguments  contained  herein  which  solution  of 
this  great  problem  he  wishes  to  accept. 


PREFACE 
By  Edith  Elmer  Wood 

The  housing  problem  presses.  We  all  know  that 
we  need  more  homes  and  better  homes,  but  authori- 
ties differ  as  to  the  means  of  getting  them. 

Joint  debates  help  the  public  to  decide  between 
the  policies  advocated.  Written  debates  are  better 
than  oral,  not  only  because  they  reach  a  larger 
audience,  but  because  they  permit  greater  accuracy. 

It  has  been  a  rare  privilege  to  defend  my  housing 
faith  against  such  able  and  fair  minded  opponents 
as  Mr.  Ackerman  and  Mr.  Murphy.  I  can  only  trust 
that  the  strength  of  my  cause  will  atone  for  the 
weakness  of  its  advocate. 


PREFACE 
By  Frederick  L.  Ackerman 

There  is  no  denying  that  by  reason  of  our  greater 
technological  knowledge  and  our  vastly  superior 
industrial  equipment,  we  stand  in  a  position  to  pro- 
duce more  useful  goods  than  any  civilization  that 
has  gone  before  us.  And  it  is  not  to  be  denied  that, 
if  we  could  bring  our  knowledge  and  our  industrial 
eqiupment  to  bear  directly  upon  the  production  of 
useful  goods,  we  could  produce  a  volume  far  in 
excess  of  the  reasonable  needs  of  everyone. 

Again,  it  is  not  to  be  denied  that  urban  centers 
are  becoming  more  congested,  slums  are  rapidly  in- 
creasing in  area  and  density.  Everywhere  in  the 
western  world  the  shortage  of  houses  is  assuming 
no  less  than  alarming  proportions.  The  majority  of 
city  dwellers  live  in  tenements  or  in  slums.  We  have 
long  since  passed  the  line  where  there  is  a  workable 
relationship  between  the  lower  wage  scales  and  the 
rent  or  price  of  adequate  houses. 

In  the  face  of  these  conditions,  we  are  constantly 
concerned  with  the  problem  of  restricting  output  lest 
we  "over  produce."  These  conditions  bear  witness 
that  something  is  operating  against  the  application 


XIV      PREFACE  BY  FREDERICK  L.  ACKERMAN 

of  our  knowledge  and  the  full  use  of  our  industrial 
equipment  and  our  natural  resources. 

Viewing  this  particular  problem  as  but  a  sector 
of  that  of  freeing  our  knowledge  and  the  use  of 
our  industrial  equipment  and  our  natural  resources 
from  that  restraint  which  arises  out  of  the  working 
of  our  competitive  system— considerations  of  profit 
and  price,  I  am  forced  to  discard  the  theory  of  sub- 
ventions. I  seek  to  discover  that  which  in  one  way 
or  another  operates  constantly  to  curtail  the  produc- 
tion of  useful  and  needed  goods. 

True  enough,  such  an  approach  to  this  problem 
runs  somewhat  outside  the  range  of  housing  dis- 
cussion. Eeformers  do  not  ordinarily  give  thought 
to  such  matters ;  it  is  ever  a  case  for  doing  something 
not  later  than  to-morrow. 

Since  I  believe  that  a  consideration  of  the  problem 
from  this  angle  must  serve  as  the  point  of  departure 
of  any  inquiry  into  what  had  best  be  done  about  it, 
I  welcome  this  opportunity  to  debate  the  question 
with  two  such  well  known  authorities  as  Mrs.  Wood 
and  Mr.  Murphy,  who  stand  as  acknowledged  spokes- 
men for  certain  fairly  well  formulated  points  of 
view. 


FOREWORD 

This  debate  was  arranged  by  and  held  under  the 
auspices  of  the  Press  Debates  Association. 

Thesis  of  the  Debate 

Industry,  commerce,  agriculture,  government,  the 
whole  machinery  of  civilization,  are  not  ends  in 
themselves,  but  means  to  the  great  human  end — the 
creation  and  maintenance  of  a  healthful,  happy 
home.  The  United  States  is  short  one  million  homes 
to-day.  It  has  millions  of  homes  which  are  far  below 
standard  and  which  ought  to  be  scrapped,  were  it 
not  for  the  present  famine. 


WHAT  ARE  WE  GOING  TO  DO  ABOUT  IT? 

Topics  of  the  Debate 

Topic         I    Conditions — Causes — Remedies 
Topic       II     Shall  Public  Credit  Be  Employed? 
Topic     III     Shall  We  Have  Municipal  Housing? 
Topic      IV    Shall  We  Exempt  Mortgages  and  Im- 
provements from  Taxation? 
xv 


XVi  FOREWORD 

Topic       V    How  Shall  We  Deal  With  Congestion? 
Topic      VI    How  Can  Land,  Labor  and  Materials 

Be  Made  Available? 
Topic    VII    What  Are  the  First  Steps? 
Topic  VIII    Summary  and  Conclusion. 

Each  debater  speaks  three  times  to  each  topic. 


TOPIC   I 
CONDITIONS— CAUSES— REMEDIES 


TOPIC   I 
FIRST  ARGUMENT 

By  John  J.  Murphy 

1.  Housing   Shortage   due    to    Disorganization   of 

Building  Industry  during  the  war.  Shortage 
continued  by  Government's  exempting  its  own 
bonds,  while  heavily  taxing  money  employed 
in  housing.  I  urge  Government  cease  this 
unfair  competition  for  capital  which  handicaps 
private  enterprise  in  house  building. 

2.  Mrs.  Wood  proposes  to  leave  in  the  hands  of  the 

Government  the  supply  of  "  homes  for  lower- 
paid  wage  earners' '  thus  creating  a  new  class 
of  state  aided  laborers. 

3.  Mr.  Ackerman  proposes  a  programme  which  if  fea- 

sible at  all  would  require  half  a  century  for  its 
realization. 

HOUSING  SHORTAGE  A  WORLD  PROBLEM 

Within  the  recollection  of  men  now  living  there 
has  been  no  such  acute  shortage  of  housing  as  is 
now  manifested.  It  has  become  a  world  problem. 
The  press  of  all  civilized  peoples  bears  testimony  to 

3 


4       *  V  {  THE  HOUSING  FAMINE 

the  fact  that  people  everywhere  are  unable  to  find 
homes  in  cities.  Rents  are  rising  to  famine  prices; 
hence  social  unrest  is  expressing  itself  in  many  forms. 
Cities  in  Europe  are  warning  newcomers  to  return 
whence  they  came.  In  some  German  cities  people 
owning  or  occupying  houses  containing  more  rooms 
than  are  needed  for  economical  use  by  their  families, 
must  take  lodgers  or  groups  of  lodgers  at  rates  fixed 
by  the  Municipality. 

RESTRICTING    RACK-RENTS 

In  American  cities  the  hitherto  rare  phenomenon 
of  two  or  even  three  families  occupying  rooms, 
formerly  the  home  of  a  single  family,  has  become 
frequent,  if  not  common.  Legislatures  are  heeding 
the  public  clamor,  and  passing  laws,  constitutional 
or  unconstitutional,  regulating  rents  and  tenancies. 
Men  far-sighted  enough  to  anticipate  the  shortage 
and  unscrupulous  enough  to  take  advantage  of  it, 
have  been  acquiring  fortunes  by  exacting  rents  out 
of  all  proportion  to  the  values  of  the  properties 
affected. 

BUILDING   MACHINERY   DISORGANIZED 
BY   GOVERNMENT 

Among  the  causes  of  the  condition  are  the  dis- 
organization of  the  machinery  of  building  by  the 
Federal  Government  during  the  war,  in  its  efforts 
to  furnish  the  necessary  supplies  of  men  and  muni- 
tions   for    war    purposes.      No    discrimination    was 


CONDITIONS— CAUSES— REMEDIES  5 

made  in  the  draft  in  favor  of  mechanics  employed 
in  the  building  trades;  the  government  directly  in- 
structed the  companies  engaged  in  lending  money 
for  building  construction  to  cease  such  loans.  Men 
from  rural  districts  were  brought  more  or  less  un- 
willingly in  contact  with  the  amenities  of  city  life. 
Many  of  them  never  returned  to  their  home  com- 
munities, and  others  who  did  return  brought  their 
families  to  the  cities  later,  attracted  by  the  nominally 
high  wages  paid  for  ordinary  labor,  and  the  lure  of 
city  life. 


Whenever  there  are  more  families  seeking  homes 
than  there  are  accommodations  to  house  them,  even 
though  the  surplus  of  home  seekers  be  not  great, 
rents  rise  abnormally,  landlords  become  indifferent 
to  the  proper  maintenance  of  their  houses,  and  we 
witness  the  anti-social  spectacle  of  families  under 
pressure  of  necessity,  bidding  one  another  out  of 
their  homes,  with  consequent  creation  of  bad  feeling 
in  the  community,  frequently  resulting  in  disorder 
and  destruction  of  property.  "All  that  a  man  hath 
will  he  give  for  his  life,"  and  hence  there  is  no 
limit,  except  a  man's  earning  power,  to  what  he 
will  give  for  a  home  under  pressure  of  necessity. 

MORE  HOUSES  ONLY  SOLUTION 

The  only  remedy  for  the  housing  shortage  is  tha 
construction  of  more  houses.    Houses  are  constructed 


6  THE  HOUSING  FAMINE 

on  land  with  material  and  by  labor.  In  order  to 
fuse  these  elements  into  a  house  capital  is  necessary. 
Capital  flows  into  those  investments  where  it  is  most 
certain  of  security,  and  among  investments  equally 
secure,  it  will  seek  that  which  promises  the  largest 
return.  Investment  in  houses  seems  to  have  inherent 
attractions  for  a  great  number  of  people.  Capital 
can  be  induced  to  invest  in  enterprises  promising 
profit,  but  can  rarely  be  coerced.  In  war  times  the 
coercion  of  capital  is  sometimes  urged  as  the  corre- 
lative of  conscription  of  men,  but  no  practical  plan 
has  been  devised,  or  at  least  has  been  tried,  to 
carry  out  this  idea.  It  may  therefore  be  assumed 
that  in  time  of  peace  no  such  plan  is  practicable. 

GOVERNMENT   SHOULD   REMOVE   OBSTACLES 

Government  should  remove  the  obstacles  that  it 
now  places  in  the  way  of  investment  of  private  capital 
in  housing.  In  the  last  year  the  sum  of  one  hundred 
and  sixty  millions  of  dollars  was  invested  in  the  con- 
struction of  dwellings  in  Greater  New  York  and 
more  than  a  billion  in  all  kinds  of  buildings  in  the 
whole  country.  This  would  seem  fairly  conclusive 
that  there  is  available  capital  for  the  construction 
of  necessary  housing,  if  conditions  were  made  suffi- 
ciently favorable.  If  Government,  National,  State  and 
Municipal,  would  now  take  off  the  brakes  which 
they  put  upon  housing,  the  supply  would  be  brought 
quickly  up  to  the  level  of  effective  demand. 


CONDITIONS—CAUSES— REMEDIES 


HOW   GOVERNMENT   OBSTRUCTS 

The  things  which  tend  to  make  housing  costly 
in  normal  times  are  the  exclusion  of  foreign  material 
by  tariffs,  the  Federal  income  tax  on  incomes  derived 
from  mortgages,  the  State  income  tax  on  the  same 
subject,  the  real  estate  tax  on  buildings,  the  high 
prices  which  have  to  be  paid  for  loans  in  addition 
to  the  normal  interest — for  every  one  realizes  the 
Usury  Law  is  evaded  in  those  States  where  it  exists 
— and  the  high  price  of  land.  When  to  all  of  these 
difficulties  is  added  the  all-around  high  prices  due 
to  the  depreciated  dollars  of  a  highly  inflated  cur- 
rency, the  wonder  is  not  that  building  is  inadequate, 
but  that  any  building  is  done  at  all.  The  short  way 
to  an  adequate  housing  supply  is  the  abolition  of 
these  restrictions,  so  that  money  may  flow  normally 
into  housing  investments,  instead  of  being  turned 
aside  to  less  necessary  uses  where  larger  profits  are 
forthcoming. 


RESTRICTIVE   LEGISLATION   NEEDED   TEMPORARILY 

Restrictive  legislation  seems  to  be  necessary  tem- 
porarily in  order  to  allay  social  discontent,  and,  how- 
ever undesirable  in  itself,  to  carry  us  over  the  peak 
of  the  shortage  which  seems  to  be  due  next  Pall. 
But  naturally,  it  will  do  nothing  to  increase  supply, 
and  will  operate  more  or  less  directly  to  prevent  it. 
Any  Government  action  which  restricts  profits  with- 
out  guaranteeing  minimum  returns  must  tend  to 


8  THE  HOUSING  FAMINE 

check  investment  in  the  class  of  property  affected. 
If  we  restrict  with  one  hand,  in  recognition  of  the 
necessities  of  a  deplorable  situation,  we  must  en- 
courage with  the  other,  or  the  United  States  will 
face  a  condition  like  that  now  confronting  England, 
where  the  Rent  Restriction  Act,  which  has  been  in 
force  since  the  beginning  of  the  war,  has  totally 
paralyzed  private  construction  of  buildings  for  rent- 
ing purposes,  and  where  the  expected  repeal  of  the 
same  Act  now  threatens  to  precipitate  social  revolu- 
tion. 


CONDITIONS— CAUSES— REMEDIES 


TOPIC   I 

FIRST   ARGUMENT 

By  Edith  Elmer  Wood 

1.  Because  good  housing  is  necessary  to  health  and 

cannot  be  supplied  at  a  profit  to  lower-paid 
wage  earners,  I  favor  its  supply,  at  cost,  through 
State  Action. 

2.  Mr.  Murphy's  measures  are  inadequate,  and  relate 

only  to  the  present  temporary  shortage, 

3.  Mr.  Ackerman's  proposals  are  revolutionary. 

THE   HOUSING   PROBLEM:     ITS  TWO   PHASES 

The  rapid  growth  of  cities  during  the  last  century 
has  brought  to  the  United  States,  as  to  all  other 
industrial  countries,  an  insistent  problem — how  to 
assure  to  its  workers  wholesome  homes,  accessible  to 
their  work,  at  prices  they  can  pay.  It  has  been 
estimated  that  there  are  two  million1  homes  in  the 
United  States  so  bad  as  to  constitute  an  acute  menace 
to  the  health,  morals  and  citizenship  of  those  whom 
they  purport  to  shelter,  while  several  million  more 
are  below  any  standard  we  could  possibly  accept 
as  normal. 


10  THE  HOUSING  FAMINE 

The  cessation  of  building  during  the  war,  and 
the  high  price  of  materials  and  of  labor  which  have 
checked  its  resumption  since  the  war,  have  brought 
about  an  actual  shortage  of  houses,  estimated  at 
one  million,2  which  is  seriously  inconveniencing  even 
the  well-to-do.  This  secondary  problem,  in  its  nature 
transitory,  may  prove  a  blessing  in  disguise  if  it 
jolts  all  classes  of  society  into  thinking  in  terms 
of  housing. 


housing  conditions:   the  submerged  tenth 

Windowless  bedrooms,  heavy  with  the  odors  of 
under-bathed,  overcrowded  humanity,  cellar  homes 
where  babies  dwindle  and  tubercle  bacilli  thrive, 
suggest  great  cities.  New  York  probably  has  half 
a  million  people  sleeping  in  rooms  without  windows 
to  the  outer  air  in  the  old  tenement  houses  built 
before  1879,  and  a  million  and  a  half  more  in  the 
dumb-bell  tenements  built  between  1879  and  1901 
and  in  other  old  houses  with  utterly  inadequate 
ventilation.  Boston  has  132  streets  less  than  14 
feet  wide.  One  populous  North  End  thoroughfare, 
Webster  Avenue,  built  up  solidly  with  four-and-five- 
story  tenements,  varies  in  width  from  four  to  nine 
feet.  Board  Alley  is  only  two  feet  wide.  Philadel- 
phia has  165  miles  of  unsewered  streets  and  ap- 
proximately 30,000  privy  vaults.  St.  Louis  has 
nearly  as  many,  and  Baltimore  probably  more.  But 
smaller  cities  sometimes  have  even  worse  conditions, 
for  want  of  any  restraining  law.    And  dilapidation, 


CONDITIONS— CAUSES— REMEDIES  1 1 

overcrowding,  lack  of  sanitation,  can  lay  their  blight 
even  on  a  rural  community. 

CAUSES  OF  BAD  HOUSING:     GREED,   IGNORANCE, 
APATHY 

As  to  causes,  there  have  always  been  the  greed 
of  landlords,  the  ignorance  of  tenants,  and  the 
apathy  of  the  general  public.  But  they  are  seen 
to  be  hardly  more  than  aggravating  causes  when 
compared  with  the  real  cause — the  economic  impasse. 

NO   PROFIT  IN   BUILDING   FOR  UNSKILLED 
WAGE   EARNERS 

No  one  builds  houses  for  unskilled  wage  earners 
as  a  business  venture,  because  there  is  no  profit  in 
it.  There  has  been  no  profit  in  it  for  a  very  long 
time.  New  houses  are  built  for  those  in  better  cir- 
cumstances and  the  unskilled  worker  only  inherits 
them  when  they  have  grown  too  shabby  for  any  one 


BUILDING   COSTS  IN    1916 

In  1916  it  was  pointed  out3  that,  taking  the  country 
by  and  large,  the  most  modest  sort  of  a  four-  or 
five-room  house,  or  its  equivalent  city  flat,  could  not 
be  built,  and  site  provided,  for  less  than  $1800, 
and  such  a  place  could  not  rent  on  the  most  moderate 
economic  basis  of  5  or  6  per  cent  net  (10  per  cent 
gross)  for  less  than  $15  a  month.    Now  at  that  time, 


12  THE  HOUSING  FAMINE 

according  to  government  reports,  more  than  half 
the  wage  earners  of  the  United  States  were  receiving 
less  than  $15  a  week,  and  a  week's  wage  for  a 
month's  rent  is  the  maximum  a  man  can  safely  pay. 

BUILDING   COSTS  IN   1920 

These  figures  are  obsolete  to-day.  Wages  and 
building  costs  have  gone  up  from  50  to  100  per  cent. 
But  the  relationship  between  them  remains  the  same. 
The  bulk  of  workers  still  cannot  pay  an  economic 
rent  on  a  new  house.  Therefore,  since  old  houses 
will  not  last  forever  (and  many  of  them  ought  not 
to  be  allowed  to  last  at  all),  and  as  shelter  is  a 
necessity,  we  must  find  a  remedy. 

he  remedy:   supply  of  houses  at  cost 
as  a  public  utility 

The  remedy  lies  in  State  action — using  the  word 
" state' '  in  the  broad  sense  of  the  "body  politic." 
Houses  for  unskilled  wage  earners  must  be  supplied 
at  cost  as  a  public  utility.  This  may  be  done  directly 
or  indirectly.  The  indirect  system  is  the  supplying 
of  credit  from  a  public  source.  The  direct  system 
involves  the  building  of  houses  by  a  public  authority. 
"We  shall  describe  both  methods  more  fully  here- 
after. Both,  by  the  way,  are  recommended  by  the 
Housing  Committee  of  the  Eeconstruction  Commis- 
sion in  the  report  recently  transmitted  to  the  legis- 
lature of  New  York  with  a  strong  endorsement  by 
Governor  Smith. 


CONDITIONS— CAUSES— REMEDIES  13 

These  methods  of  handling  the  housing  problem 
are  not  new.  They  have  been  extensively  used  in 
Great  Britain,  Germany  and  Belgium  for  more  than 
a  generation.  Twelve  other  European  countries, 
three  of  South  America,  besides  Cuba,  Australia, 
New  Zealand,  and,  very  recently,  Canada,  have  re- 
sorted to  them  in  varying  degree.4  We  are  fortunate 
in  having  spread  before  us  so  large  a  body  of  ex- 
perience. 


1  See  Author's  Housing  of  the  Unskilled  Wage  Earner,  p.  7. 

1  See  Housing  Betterment,  December,  1919,  p.  45. 

*  By  John  Nolen  in  Proceedings  of  the  National  Housing  Assoc., 
Vol.  V.,  p.  5. 

4  See  Bulletin  158,  U.  S.  Bureau  of  Labor  Statistics:  Govern- 
ment Aid  to  Home  Owning  and  Housing  of  Working  People  in 
Foreign  Countries.  See  also  Housing  of  the  Unskilled  Wage 
Earner,  Chapter  V. 


14  THE  HOUSING  FAMINE 


TOPIC   I  , 
FIRST   ARGUMENT 

By  Frederick  L.  Ackerman 

1.  Housing    famine,    congestion,    slums — drift    of 

population  into  cities — consequent  upon  modern 
industrial  system.  Relief  to  be  found  in  elim- 
inating waste,  losses,  sabotage  which  follows 
system  of  price  competition. 

2.  Mrs.  Wood  completely  ignores  this  phase  of  the 

problem.  Proposes  to  subsidize  system  which 
has  caused  the  trouble. 

3.  Mr.  Murphy  deals  superficially  with  causes.    Pro- 

poses a  variety  of  palliatives. 

SYMPTOMS  ARE  NOW  ACUTE:     NOT  THE  RESULT  OF  WAR 

Nowhere  in  the  entire  Western  World  are  houses 
being  erected  in  sufficient  number.  Voluntary  com- 
mittees, official  committees,  governmental  commis- 
sions are  surveying  conditions,  reporting,  framing 
legislation.  Thus  far  all  this  talk  about  it  has  not 
produced  houses;  we  are  faced  with  the  stubborn 
fact  that  sufficient  houses  are  not  being  built. 


CONDITIONS— CAUSES— REMEDIES  15 

This  distressing  condition  is  set  down  as  the  result 
of  the  war.  We  have  short  memories.  For  genera- 
tions Europe  has  been  struggling  with  the  problem 
of  slums,  shortage  and  congestion — the  housing 
problem.  How  seriously  this  matter  was  treated 
in  the  pre-war  days  may  be  gathered  from  a  study 
of  pre-war  housing  legislation.5  By  gathering  this 
material  together,  we  are  able  to  make  note  of  cer- 
tain physical  conditions  which  are  characteristic  of 
what  has  taken  shape  within  the  Western  World 
during,  say,  the  last  century  and  a  half.  These 
conditions  are  best  referred  to  as  drifts  or  tendencies. 
Among  them  we  note  in  particular: 

The  remarkably  rapid  rise  and  expansion  of  in- 
dustrial centers ;  a  corresponding  (relative)  decrease 
of  rural  population  and  of  small  communities. 

The  rapid  increase  in  congestion  and  the  degree 
of  congestion  within  these  ever  expanding  indus- 
trial urban  centers;  the  rapid  and  constant  spread 
of  the  "slum."6 

That  the  number  of  new  houses  erected  is  falling 
behind  the  number  required. 


INDUSTRIAL   SYSTEM   UNDER   SUSPICION 

The  drift  into  these  conditions  of  mal-adjustment 
has  taken  place  within  a  given  area  (State)  in  ap- 
proximately the  same  degree  that  the  area  in  ques- 
tion has  fallen  into  the  ways  of  carrying  on  its 
production  through  the  system  spoken  of  as  the 
"Modern  Industrial  System.' * 


16  THE  HOUSING  FAMINE 

This  statement  implies  a  condition  of  causal 
sequence  between  the  working  of  the  modern  indus- 
trial system  and  the  conditions  of  mal-adjustment. 
To  attempt  to  establish  such  a  relation  of  cause  and 
effect  in  a  quantitative  sense  would  extend  the  argu- 
ment beyond  the  scope  of  this  discussion,  but  this 
much  may  be  said:  "The  material  frame  work  of 
modern  civilization  is  the  industrial  system,  and  the 
directing  force  which  animates  this  frame  work  is 
business  enterprise.  To  a  greater  extent  than  any 
other  known  phase  of  culture,  Modern  Christendom 
takes  its  complexion  from  its  economic  organization. 
This  economic  organization  is  the  "Capitalistic  Sys- 
tem' '  or  the  "Modern  Industrial  System,' '  so  called. 
Its  characteristic  features,  and  at  the  same  time  the 
forces  by  which  it  dominates  modern  culture,  are 
the  machine  process  and  investment  for  profit.7 

Accepting  this  as  a  statement  of  fact,  it  follows, 
of  course,  that  the  entire  range  of  conditions  from 
abandoned  farms  to  slums  and  shortage,  is  the  result 
of  the  unhampered  working  of  this  modern  indus- 
trial system. 

THE   SYSTEM   EXEKCISES   SABOTAGE 

Production  is  now  controlled  by  "business  enter- 
prise."  Business  enterprise  aims  at  producing  the 
largest  possible  returns  in  the  shortest  possible  time ; 
and  always  in  terms  of  price*  The  capitalization  of 
business  concerns  is  based  upon  their  capacity  to 
produce   earnings   and  not  upon   their  capacity   to 


CONDITIONS— CAUSES— REMEDIES  17 

produce  goods.  The  solvency  of  business  enterprise 
depends  upon  the  ability  of  its  management  to  main- 
tain  or  advance  prices.  This  is  the  system  of  "  price 
competition ' '  or  competition  in  terms  of  price.  From 
this  system  there  would  follow,  in  theory,  and  there 
follows  in  practice,  a  series  of  wastes,  duplications, 
cancellations  of  effort,  obstructions  of  one  sort  and 
another  which  may  be  rated  as  equal,  if  not  much 
larger  in  amount,  than  is  the  effort  required  to  carry 
on  the  processes  (technological)  of  producing  goods. 
To  allow  the  industrial  processes  to  run  on  without 
obstruction  would  end  in  the  lowering  of  prices: 
hence  modern  business  enterprise  functions  "success- 
fully' '  only  when  it  exercises  such  a  control  over 
production  as  to  keep  prices  up  and  production 
down.7 

THE    SYSTEM   FOUND    GUILTY 

It  is  through  such  a  system  that  we  attempt  to 
produce  all  of  the  materials  which  go  into  the  build- 
ing of  habitations  for  the  wage  worker.  What  this 
system  acomplishes  is  to  reduce  the  size  of  houses, 
curtail  the  number  erected,  and  squeeze  them  closer 
together. 

Business  is  a  matter  of  investment  for  a  profit — 
a  speculative  adventure.  Habitations  are  built 
simply  to  afford  a  means  of  carrying  on  a  specula- 
tive adventure.  Whether  or  not  habitations  are 
erected  depends  entirely  upon  whether  or  not  there 
are  other  fields  of  speculative  adventure  which  seem 
more  promising. 


18  THE  HOUSING  FAMINE 


IT   SUCKS   PEOPLE   INTO    CONGESTED   CITIES 

The  principal  causes  which  make  for  the  constant 
flow  of  population  from  farm  to  city  is  the  greater 
opportunity  of  investment  return  afforded  by  busi- 
ness for  profit  controlling  production  carried  on  by 
the  machine  process.  Hence  the  remedy  here  offered 
is  confined  to  the  economic  industrial  facts  of  modern 
life. 

THE   SOLUTION:     GET  A   NEW   INDUSTKIAL 
SYSTEM 

The  solution  of  the  housing  problem  is  to  be  had 
as  a  consequence  of  having  first  brought  about  a 
change  in  our  industrial  system  and  the  financial 
business  system  which  controls  the  industrial  system. 
In  general  outlines  the  nature  of  the  changes  may 
be  summarized  as  follows: 

Freeing  the  processes  of  production  from  that  con- 
trol which  views  production  as  a  medium  of  specula- 
tion or  investment  for  profit.  Freeing  land  from 
speculative  use. 

Eliminating  waste  and  useless  effort  which  follows 
our  system  of  price  competition. 

5  See  The  Case  for  Town  Planning,  by  Henry  Aldridge.  The 
National  Housing  and  Town  Planning  Council.  London.  See 
also  Housing  of  the  Unskilled  Wage  Earners,  by  Edith  Elmer 
Wood. 

6  See  The  Town  Laborer,  1760-1882,  by  J.  L.  Hammond  and 
Barbara  Hammond.    Longmans,  Green  &  Co.,  London. 

7  See  The  Theory  of  Business  Enterprise,  by  Thorstein  Veblen. 
Scribners. 


CONDITIONS— CAUSES—REMEDIES  19 


TOPIC   I 
SECOND   ARGUMENT 

By  John  J.  Murphy 

GUESSES   MASQUERADING   AS   ESTIMATES 

Naturally  I  find  little  to  criticise  in  Mrs.  Wood's 
statement  of  the  housing  conditions  which  we  have 
met  to  discuss.  I  do  not  attach  much  importance 
to  the  vague  guesses,  masquerading  as  estimates,  of 
the  total  number  of  unsanitary  houses  existing  in 
the  United  States,  to  which  she  lends  the  weight  of 
her  authority.  It  is  a  strange  coincidence  that  the 
same  number  of  houses  given  as  the  shortage  in  the 
United  States  is  also  given  by  the  authorities  for 
Great  Britain,  a  country  with  about  half  our  popu- 
lation. 

some  problem! 

If  there  are  two  million  existing  unsanitary  houses 
which  should  be  replaced  by  better  structure,  and 
a  deficiency  of  one  million,  we  have  clearly  a  situa- 
tion which  may  be  properly  called  some  problem! 
As  such  houses  can  not  be  produced  to-day  much 
under  $3,500  to  $5,000  according  to  location,  we  are 


20  THE  HOUSING  FAMINE 

dealing  with  a  problem  involving  a  capital  expendi- 
ture of  ten  to  fifteen  billion  dollars,  a  sum  large 
enough  to  interest  even  war  financiers. 

LANDLORDS  AND  TENANTS  ARE  JUST — FOLKS 

I  tak«  strong  exception  to  two  items  of  Mrs. 
Wood's  summary  of  causes  of  bad  housing:  landlord 
greed  and  tenant  ignorance.  Landlords,  in  spite  of 
some  recent  exhibitions  in  New  York  and  other  big 
cities,  are  just — people.  Just  now  they  own  a  neces- 
sary of  life  which  is  cornered.  If  Mrs.  Wood  will 
indicate  some  group  in  the  nation,  who  own  property, 
that  have  taken  less  than  they  could  get  for  it,  I 
will  concede  that  landlords  are  worse  than  other 
people.  As  to  tenant  ignorance,  I  know  of  no  class 
of  people  who  do  not  take  the  best  housing  they 
can  get  for  what  they  can  afford  to  spend.  Had 
tenants  been  as  wise  as  Solomon,  I  do  not  see  how 
they  could  improve  their  lot  as  individuals.  I  con- 
cede her  indictment  of  public  apathy,  and  the 
"economic  impasse" ;  this  last  count  in  the  indictment 
sounds  grave  enough  to  account  for  anything.  May 
I  suggest  to  my  opponent  an  explanatory  foot  note, 
which  will  elucidate  a  contention  now  obscured  by 
an  impervious  mask. 

HOUSES   FOR  WAGE   EARNERS   NOT   UNPROFITABLE 

I  dispute  Mrs.  Wood's  contention  that  it  does  not 
pay  to  build  houses  for  earners  of  low  wages.  Liter- 
ally thousands  of  cheap  houses  have  been  constructed 


CONDITIONS— CAUSES— REMEDIES  21 

around  our  big  cities  in  the  past  decade.  It  would 
be  as  true  to  say  that  it  did  not  pay  to  manufacture 
clothes  or  shoes  for  poor  people.  Of  course,  it  does  not 
pay  to  produce  anything  for  people  whose  wages  are 
so  low  as  not  to  reach  the  subsistence  level,  but  the 
remedy  for  that  situation  is  to  raise  the  wages,  not 
to  lower  the  rent.  I  contend,  however,  that  if  gov- 
ernment removed  the  crushing  taxes  which  it  now 
imposes  on  new  buildings,  a  sufficient  supply  would 
be  forthcoming  to  house  workers  at  current  wages. 

THE   IMPRACTICABILITY   OP   MAKING   HOUSING 
A   PUBLIC   UTILITY 

The  remedy,  as  Mrs.  Wood  sees  it,  is  to  make  the 
supply  of  housing  a  public  utility,  either  by  lending 
to  intending  builders,  or  by  direct  public  construc- 
tion. And  she  asserts  that  the  Reconstruction  Com- 
mission of  the  State  of  New  York  recommends  such 
action.  Also,  that  we  have  a  varied  assortment  of 
experiences  of  other  countries  in  similar  lines.  Much 
of  the  rest  of  this  debate  is  to  be  devoted  to  dealing 
with  these  matters  in  detail,  but  I  assert  that  it 
would  be  most  unwise,  if  feasible,  and  that  because 
of  obvious  constitutional  limitations  it  cannot  be 
made  feasible,  until  the  passage  of  so  much  time, 
that  necessity  will  compel  us  to  meet  the  situation 
some  other  way  in  the  meantime.  When  Alexander 
cut  the  Gordian  knot  he  did  not  solve  the  problem, 
he  merely  gave  an  evidence  of  his  impatience  and 
superficiality.    The  authority  of  the  Reconstruction 


22  THE  HOUSING  FAMINE 

Commission,  for  whose  good  intentions  I  have  a  high 
regard,  would  have  greater  weight  if  it  had  accom- 
plished something  in  the  year  and  a  half  of  its 
existence. 


NOT  TIME  TO  CONSTRUCT  UTOPIA 

I  leave  to  the  intelligent  reader  Mr.  Ackerman's 
statement  that  the  housing  famine  is  not  the  result 
of  the  war,  so  far  as  America  is  concerned.  Europe 
had  many  problems  before  the  war;  inadequate 
housing  was  one  of  them,  but  the  causes  there  were 
so  multitudinous  that  I  fear  we  should  never  get 
down  to  our  own  domestic  problem  if  we  tried  to 
deal  with  them.  He  indicts  our  industrial  system, 
and  I  hold  no  brief  for  it,  but  if  we  have  to  wait 
for  more  housing  until  it  is  broken  down,  the  debris 
removed  and  a  new  social  order  set  up  in  its  place, 
there  will  be  no  people  to  build  houses  or  inhabit 
them.  Like  a  business  house  which  wishes  to  enlarge 
its  premises,  while  still  holding  its  trade,  we  have 
to  replace  our  social  institutions  a  piece  at  a  time. 
Of  course,  the  other  way  would  be  easier  if  we 
could  all  agree  on  a  design  and  a  floor  plan  for  the 
building,  but  when  the  new  structure  was  agreed 
upon,  there  would  be  no  customers.  It  might  even 
not  get  erected  at  all. 


CONDITIONS— CAUSES— REMEDIES  23 


TOPIC   I 
SECOND   ARGUMENT 

By  Edith  Elmer  Wood 

let  us  get  the  question  clear 

First  of  all,  I  must  ask  my  eminent  opponent, 
former  Commissioner  Murphy,  whether  the  remedies 
he  proposes  are  intended  to  cure  the  present  short- 
age of  all  kinds  of  houses,  or  the  permanent  shortage 
of  acceptable  houses  for  workingmen?  Unless  we 
keep  the  distinction  clear  we  shall  find  ourselves 
talking  at  cross  purposes. 

INDIVIDUALISM   AND   BUSINESS   INITIATIVE 

Mr.  Murphy  appears  in  this  debate  as  the  cham- 
pion of  individualism  and  business  initiative.  He 
will  find  many  to  agree  with  him,  for  old  beliefs 
die  hard.  But  the  trend  of  modern  thought  and 
practice  is  certainly  away  from  Adam  Smith  and 
laissez  faire. 

OBSTACLES   PLACED   BY   GOVERNMENT  IN   THE   WAY 
OF   BUILDING  j 

Mr.  Murphy  says:  "Government  should  remove 
the  obstacles  that  it  now  places  in  the  way  of  invest- 


24  THE  HOUSING  FAMINE 

ment  of  private  capital  in  housing,' *  and  again: 
"Government,  national,  state  and  municipal,  must 
take  off  the  brakes.' '  He  enumerates  these  brakes 
or  obstacles  as  follows: 

1.  Tariff  on  building  materials 

2.  Tax  on  mortgages 

3.  Real  estate  tax  on  buildings 

4.  "The  high  prices  which  have  to  be  paid  for 

loans  in  addition  to   normal  interest"  i.e. 
usury 

5.  The  high  price  of  land 

6.  "All  around  high  prices  due  to  depreciated 

dollar  of  inflated  currency' ' 

For  the  first  brake,  if  we  are  to  remove  it  at  all, 
I  would  suggest  as  an  amendment,  the  exemption 
of  building  materials  destined  for  working  men's 
houses,  as  is  actually  done  in  Argentina  and  Brazil. 
The  second  and  third  are  to  be  the  subject  of  later 
discussion. 

By  no  stretch  of  the  imagination,  it  appears  to 
me,  can  the  last  three  be  described  as  obstacles  or 
brakes  placed  by  goverment  in  the  way  of  building. 
I  challenge  the  Commissioner  to  show  that  they  are 
such,  and  to  name  the  measures  he  advocates  for 
removing  them. 


GET   A  NEW   INDTJSTBIAL   SYSTEM 

There  is  no  athletic  sport  more  unsatisfactory  than 
wrestling  with  shadows.  The  blamed  things  are  so 
hard  to  get  a  grip  on! 


CONDITIONS— CAUSES—REMEDIES  25 

I  am  a  practical  person,  in  search  of  a  practical 
remedy,  for  a  very  practical  evil — and  my  dis- 
tinguished friend,  Mr.  Ackerman,  tells  me  to  "Get 
a  new  industrial  system !"  Just  like  that.  Appar- 
ently, too,  he  objects  to  alleviating  housing  evils 
in  the  meantime,  lest  a  more  tolerable  condition 
delay  the  advent  of  his  millennium. 

BY  EVOLUTION  OR  REVOLUTION? 

Does  he  mean  us  to  get  a  new  industrial  system 
by  evolution  or  by  revolution?  If  the  former,  how 
can  he  defend  the  inhumanity  of  his  opposition  to 
alleviative  measures?  It  is  like  refusing  quinine 
to  a  malaria  patient  shaking  with  ague,  because  you 
hope  to  drain  the  swamps  ultimately  and  exterminate 
the  malaria-bearing  mosquito. 

If  he  is  advising  revolution.  .  .  .  Well,  well  wait 
till  he  says  so. 

WHAT  WILL   THE   NEW   SYSTEM   BE? 

Mr.  Ackerman  says  himself  that  "The  material 
framework  of  modern  civilization  is  the  industrial 
system. ' '  Now,  it  is  a  rather  serious  matter  destroy- 
ing the  framework  of  modern  civilization.  Mr. 
Ackerman  can  hardly  expect  us  to  accept  his  leader- 
ship to  that  cataclysmic  extent  without  even  con- 
fiding to  us  what  he  proposes  to  substitute.  Is  it 
Communism?  Syndicalism?  The  soviet?  State 
socialism?  Or  the  proposed  English  revival  of  the 
medieval  guild? 


26  THE  HOUSING  FAMINE 


TOPIC   I 

SECOND   ARGUMENT 

By  Frederick  L.  Ackerman 

CAUSES — THE  ALL  IMPORTANT  MATTER 

Not  much  is  to  be  gained  by  debating  the  state- 
ments relating  to  "  Conditions. ' '  One  matter  only- 
will  I  refer  to  in  this  connection.  Mr.  Murphy- 
ignores  the  sweep  of  population  into  industrial 
centers  which  has  been  going  on  throughout  the 
Western  World  during  a  century  and  a  half.  This 
sweep,  I  insist,  is  the  "  Condition " ; — congestion,  the 
slum,  the  housing  famine  are  the  physical  evidences. 

Nor  will  "Bemedies"  be  dealt  with  at  this  stage 
of  the  discussion  since  opportunities  will  be  afforded 
for  considering  this  phase  of  the  subject  under  the 
several  topics  as  they  are  opened  up  in  the  series 
to  follow.  What  is  of  importance  to  now  consider 
is:  Why  the  "Condition"?    Why  this  discussion? 

TOO   MUCH    STRESS    ON   WAR 

Mrs.  Wood  is  quite  definite : — she  sets  down  three 
principal    causes:     "the    greed    of    landlords,    the 


CONDITIONS— CAUSES— REMEDIES  27 

ignorance  of  tenants,  and  the  apathy  of  the  general 
public.' '  Mr.  Murphy  stresses  the  war  and  the 
accompanying  Federal  administrative  action  as  the 
cause.  Of  course  the  war  affected  the  situation. 
But  what  about  the  condition  before  the  war? 

The  conditions  noted  by  Mrs.  Wood,  as  con- 
stiuting  the  three  principal  causes,  should  be  viewed 
as  in  the  nature  of  attitudes — favorable  if  you  like — 
to  the  development  of  the  conditions  rather  than 
as  causes.  But  I  will  not  quibble  over  the  meaning 
of  words. 


OLD   LAWS   AND   NEW    CONDITIONS 

In  the  eighteenth  century — before  the  days  of 
machine  industry,  corporation  finance,  big  business 
and  the  world  market — during  the  days  of  handicraft 
industry  and  petty  trade — certain  live  and  let 
live  ideas  were  thrown  into  formal  shape  and 
adopted  to  govern  the  system  of  law  and  order  under 
which  the  people  of  that  time  saw  fit  to  live.  That 
system  of  law  and  custom  has  stood  firm  while 
sweeping  changes  have  taken  place  in  the  field  of 
industry  and  finance.  Laws,  framed  to  uphold  the 
rights  (property)  of  individuals  are  now  called  upon 
to  uphold  the  same  with  respect  to  large  scale  in- 
dustry, large  scale  credit,  large  scale  business — all 
of  which  of  course  could  not  have  been  contemplated 
at  the  time  they  were  formulated.8 

The  laws  which  were  then  established  to  safeguard 
equality  among  men  in  all  their  economic  relations 


28  THE  HOUSING  FAMINE 

have  come  to  so  operate,  under  the  changed  condi- 
tions, that  the  decisions  as  to  how  men  shall  live  are 
now  made  by  those  holding  the  communities ' 
economic  power. 

THE   RIGHT  TO   SATISFY   GREED 

So  I  would  not  set  down  the  "  ignorance  of 
tenants"  nor  the  u apathy  of  the  general  public' ' 
as  the  cause  of  congestion,  slums  and  the  distressing 
shortage  of  houses.  The  tenants  and  the  general 
public  are  helpless  to  act  against  the  powerful  finan- 
cial forces  sustained  by  those  eighteenth  century 
laws  framed  to  meet  conditions  under  the  rule  of 
petty  trade  and  handicraft  industry.  The  tenant 
and  the  public  may  be  ever  so  alive  to  the  conditions 
— but  being  alive  is  of  little  consequence :  action  in 
the  direction  of  their  interest  and  desires  is  a  matter 
to  be  determined — not  by  considerations  relating  to 
what  may  be  good  for  them,  but  by  the  financial 
exigencies  of  the  situation  as  viewed  by  those  holding 
the  balance  of  economic  power.  The  rights  of  in- 
dividuals have  become  as  little  fluttering  leaves  in  the 
powerful  gusts  of  financial  forces. 

THE   MAJOR   QUESTION   ASKED 

The  question  as  to  what  has  caused  the  housing 
famine,  slums,  etc.,  is  not  to  be  disposed  of  by  saying 
that  it  is  because  landlords  have  become  greedy, 
tenants  ignorant  and  the  public  apathetic.  Greed 
may  be  set  down  as  a  cause;  but  the  right  to  satisfy 


CONDITIONS— CAUSES—REMEDIES  29 

greed  is  a  legal  matter — a  matter  which  can  be 
changed  by  political  action  if  the  people  should  so 
elect.  So  I  ask  the  question:  How  about  disallowing 
by  legal  action  this  legal  right  to  satisfy  greed? 

8  See  The  Vested  Interests  and  the  State  of  the  Industrial  Arts, 
by  Thorstein  Veblen.    B.  W.  Huebsch. 


30  THE  HOUSING  FAMINE 


TOPIC   I 
THIRD   ARGUMENT 

By  John  J.  Murphy 

NO    DISCRIMINATION    BETWEEN    TYPES    OF    DWELLINGS 

In  reply  to  Mrs.  Wood: 

I  want  to  cure  the  shortage  of  houses  of  all  kinds. 
As  a  matter  of  fact,  the  present  housing  shortage 
has  hit  people  of  moderate  means  harder  than  the 
very  poor.  Kents  have  risen  more,  proportionally,  in 
the  more  expensive  types  of  housing  than  in  the 
cheaper  grades.  Business  building  must  keep  up  if 
people  in  cities  are  to  find  employment.  Therefore, 
I  suggested  no  discrimination  between  types  of  build- 
ings, though  I  would  accept  the  idea,  if  it  could 
be  done  constitutionally.  There  are  many  states  in 
which  it  can  not  be  done,  without  amendments. 

GOVERNMENT   MEDDLING    PROVOKES 
INEVITABLE    DISASTER 

I  quite  agree  with  Mrs.  Wood  that  the  trend  of 
modern  thought  is  away  from  Adam  Smith  and 
laissez-faire.  To  the  extent  that  the  swing  away 
from  those  ideas  continues,  to  the  same  extent  do 


CONDITIONS— CAUSES—REMEDIES  31 

we  approach  the  catastrophe  which  many  thoughtful 
persons  now  deem  inevitable.  The  condition  to 
which  the  world  has  come  as  a  consequence  of 
"modern  thought' '  is  so  complete  an  indictment  of 
that  pseudo-philosophy,  that  I  would  not  have 
deemed  that  a  person  of  Mrs.  Wood's  acumen  would 
have  advanced  it  as  an  argument  on  her  side. 

HOW  GOVERNMENT  CAN  HELP 

Mrs.  Wood  asks  me  to  explain  how  the  Govern- 
ment can  reduce  prices  of  money,  land  and  goods. 
The  attempt  of  the  Government  to  suppress  usury, 
makes  actual  cost  of  money  higher  to  the  individual, 
therefore  the  so-called  usury  law  should  be  repealed. 
The  failure  of  Government  to  collect  out  of  land 
values  the  full  price  of  services  rendered,  makes  land 
much  dearer  than  there  is  any  reason  it  should  be. 
The  wasteful  method  of  financing  the  war  has  more 
than  doubled  our  currency,  while  the  taxation  of 
production  has  been  raising  prices  in  other  direc- 
tions. If  the  State  will  tax  special  privileges,  among 
which  are  land  titles,  mines,  franchises,  and  exempt 
productive  enterprises,  it  will  bring  prices  of  hous- 
ing materials  down  to  reasonable  figures,  and  all 
other  prices  as  well. 

In  reply  to  Mr.  Ackerman: 

BLAMING  THE   THERMOMETER   FOR   HOT  WEATHER 

It  is  not  easy  to  combat  so  indefinable  a  proposi- 
tion as  that  which  bases  our  housing  difficulties  on 


32  THE  HOUSING  FAMINE 

the  " right  to  satisfy  greed.' '  With  rare  excep- 
tions, the  conduct  of  mankind  is  based  on  the  desire 
to  get  as  much  as  possible  for  what  we  have  to  sell, 
and  to  give  as  little  as  possible  for  what  we  must 
buy.  Landlords  would  always  take  1000%  profit  if 
they  could  get  it,  and  tenants  would  occupy  houses 
for  nothing  if  they  could.  So  far  as  these  char- 
acteristics of  individuals  go  they  are  always  and 
ever  the  same.  Blaming  the  landlord  for  high  rent 
is  like  throwing  the  thermometer  out  of  the  window 
on  a  hot  day.  He  gets  what  he  can  and  does  not 
get  any  more  because  he  can't.  Price  is  regulated 
by  the  relation  of  supply  and  demand.  Greed  is 
merely  an  invidious  way  of  referring  to  an  excessive 
development  of  that  self-interest  which  our  modern 
civilization  necessitates  as  a  requisite  of  living. 


CONDITIONS— CAUSES— REMEDIES  33 


TOPIC    I 
THIRD   ARGUMENT 

By  Edith  Elmer  Wood 

u  vague   guesses   masquerading   as  estimates  "  * 

Mr.  Murphy  appears  to  doubt  that  we  are  short 
a  million  dwellings  in  the  United  States.  The 
estimate  is  based  on  the  following  figures:  Prom 
1910  to  the  beginning  of  1917  approximately  400,000 
new  dwellings  were  constructed  annually  in  this 
country.  Had  the  normal  building  rate  been  main- 
tained, about  1,200,000  more  dwellings  would,  there- 
fore, have  been  built  by  the  beginning  of  1920.  The 
actual  number  was  228,000.10 

The  British  housing  shortage,  due  to  their  longer 
immersion  in  the  war,  is  much  more  acute  than  ours. 
Hence  the  subsidies. 

i 

MR.  MURPHY  COMES  TO  THE  RESCUB 
OF  LANDLORDS  AND  TENANTS 

I  agree  with  Mr.  Murphy  that  landlords  are  no 
" worse  than  other  people' '  and  that  any  other  prop- 
erty-owning group  would  have  taken  the  same 
advantage  of  having  cornered  "a  necessary  of  life." 


34  THE  HOUSING  FAMINE 

I  will  further  say  that  if  those  who  do  not  own 
property  were  endowed  with  it,  they  would  behave 
in  the  same  manner.  The  inference  I  draw  from 
all  this  is,  however,  that  the  state  must  break  that 
corner  in  a  necessary  of  life  by  entering  the  field 
itself,  if  it  would  avoid  the  more  revolutionary 
remedies  of  Mr.  Ackerman. 

"Had  tenants  been  as  wise  as  Solomon,' '  says  Mr. 
Murphy,  "I  do  not  see  how  they  could  improve  their 
lots  as  individuals.' '  Neither  do  I.  That  is  why 
collective  action  is  necessary. 

WHY   NOT   RAISE   WAGES   FOR   A   CHANGE? 

Raising  wages  is  a  popular  pastime.  But  how  will 
Mr.  Murphy  raise  them  without  raising  building 
costs,  in  which  they  are  so  large  an  item?  And  how 
will  he  prevent  those  who  have  cornered  a  necessary 
of  life  from  raising  rents  to  match? 

9  The  evidence  on  which  I  based  my  estimate  of  two  million 
unsanitary  dwellings  in  the  United  States  (sheltering  one-tenth 
of  our  population)  will  be  found  in  Chapters  I  and  II  of  Housing 
of  the  Unskilled  Wage  Earner.    It  is  too  long  to  quote  here. 

10  The  following  figures  are  from  an  article  by  Wharton  Clay 
in  Engineering  and  Contracting  for  March  24,  1920: 

Dwellings  in  the  United  States 

1910 17,895,845 

1915 19,853,517 

1916 20,263,051 

1917 20,672,051 

1918 20,808,562 

1919 20,829,039 

1920 20,900,000 


CONDITIONS— CAUSES— REMEDIES  35 


TOPIC   I 
THIRD   ARGUMENT 

By  Frederick  L.  Ackerman 

WHAT   IS   INDUSTRY   FOR? 

I  ask  Mr.  Murphy  to  recall  the  statement  which 
is  made  the  thesis  of  debate  which  says  "indus- 
try, commerce,  agriculture,  government  .  .  .  are  not 
ends  in  themselves  but  means  to  the  great  human 
end,  the  creation  and  maintenance  of  healthful, 
happy  homes."  Had  this  debate  been  confined  to 
finding  the  best  way  "to  provide  housing  of  some 
kind — I  will  not  say  whether  good  or  bad" — I  would 
not  have  wasted  my  time  to  discuss  the  matter.  I 
insist  that  I  am  discussing  the  thesis  and  that  my 
argument  is  well  within  the  range  of  discussion 
anticipated  in  the  statement  of  the  thesis. 

WHY   NOT  TRY   TO   GET  A   GRIP   ON   THINGS? 

I  agree  with  Mrs.  Wood  that  "the  blamed  things 
are  so  hard  to  get  a  grip  on,"  yet  I  am  not  at  all 
convinced  that  the  remedies  suggested  by  Mrs.  "Wood 
are  in  the  nature  of  getting  a  "grip  on  things." 
She  avoids  coming  to  grips  with  the  real  problem. 


36  THE  HOUSING  FAMINE 

Again  the  old  theme  of  the  industrial  revolution 
crops  up.  Again  I  admit  the  necessity  for  change, 
but  I  see  no  reason  for  calling  it  a  revolution.  A 
study  of  the  present  British  situation  indicates 
clearly  that  the  system  of  subventions  is  not  pros- 
pering in  England.  Proposals  are  now  on  foot 
for  organizing  the  whole  British  building  industry 
with  a  view  of  eliminating  all  of  those  wastes,  which 
I  have  referred  to  repeatedly,  by  scrapping  the  sys- 
tem of  price  competition.  It  is  too  early  to  draw 
conclusions,  but  I  would  suggest  a  careful  study  of 
what  is  now  being  developed  in  this  connection. 

This  recent  British  effort  is  moving  in  the  right 
direction,  which  can  not  be  said  of  Mrs.  Wood's 
argument.  Perhaps  it  is  revolutionary  to  advance 
the  idea  that  exploitation  should  be  dispensed  with. 
But  saying  so  proves  nothing. 


TOPIC  II 
SHALL  PUBLIO  CREDIT  BE  EMPLOYED? 


TOPIC   II 
FIRST   ARGUMENT 

By  John  J.  Murphy 

1.  I  oppose  the  use  of  public  credit  on  the  ground 

that  it  is  unnecessary,  if  Government  will  cease 
penalizing  private  building  enterprise  by  exces- 
sive taxation. 

2.  Mrs.  Wood's  plan  assumes  that  a  vast  mass  of 

people  are  unable  to  support  themselves  without 
government  subsidy. 

3.  Mr.  Ackerman  objects  because  it  would  only  serve 

to  bolster  up  a  defective  social  system. 

USE   OF   PUBLIC   CREDIT   ONLY  A  LAST  RESORT 

Having  due  regard  to  the  wasteful  manner  in  which 
public  money  is  usually  expended,  I  think  it  will  be 
generally  conceded  that  public  credit  should  not  be 
embarked  in  any  except  obviously  public  enterprises, 
unless  all  other  means  have  been  tried  and  found 
wanting.  In  the  preceding  statement  I  have  shown 
that  in  spite  of  governmental  discouragement  an 
enormous  amount  of  capital  is  willing  to  invest  in 
building  of  one  kind  or  another.    The  difficulty  of 

39 


40  THE  HOUSING  FAMINE 

obtaining  money  for  housing  loans  is  not  that  lenders 
are  unwilling  to  put  money  into  buildings,  but  that 
they  are  unwilling  to  advan^  as  high  a  percentage 
of  the  cost  of  the  building  as  they  did  hitherto. 

FEAR  OF  LOSS  DUE  TO   PRICE   CONTRACTION 

The  reason  is  that  they  fear  that  within  a  year  or 
two  there  will  be  such  a  drop  in  the  cost  of  materials 
and  labor,  that  a  building  erected  under  present 
conditions  will  suffer  a  depreciation  of  20%  in  a 
couple  of  years,  for  the  value  of  a  thing  at  any  given 
time  is  generally  what  it  can  be  reproduced  for  at 
that  time.  No  one  can  deny  that  this  is  a  reasonable 
forecast.  It  may  not  happen,  but  people  who  invest 
in  such  durable  things  as  buildings  must  take  into 
account  the  probabilities  for  at  least  a  decade. 

DANGER   IN  MIXING   REAL  ESTATE   AND   POLITICS 

If  public  credit  be  employed,  it  follows  that  Gov- 
ernment must  take  a  large  part  in  supervising  and 
determining  the  locations,  designs,  units,  etc.,  of  the 
houses  into  which  money  so  raised  should  be  put. 
Here  however,  another  difficulty  arises.  It  brings 
the  Government,  or  whatever  branch  of  it  may  be 
charged  with  such  duty,  into  contact  with  the  real 
estate  business  and  the  combination  of  politics  and 
real  estate  makes  the  most  explosive  compound 
known.  In  the  war  it  was  necessary  to  procure 
sites  in  a  hurry,  and  it  is  to  be  presumed  that  men 
engaged  in  such  work  did  their  duty  patriotically, 


SHALL  PUBLIC  CREDIT  BE  EMPLOYED?       41 

but  it  is  commonly  believed  that  a  fair  investigation 
of  the  real  estate  transactions  of  the  Government 
would  throw  into  the  shade  most  of  the  other  exposes 
which  have  been  made  since  the  armistice. 

WOULD   SCARE   OFF  PRIVATE   INVESTORS 

If  public  credit  be  employed,  it  would  naturally 
tend  to  absorb  a  large  amount  of  the  private  capital 
which  would  be  available  for  housing.  There  are 
some  people  who,  because  they  do  not  see  the  prob- 
lem through,  do  not  realize  that  the  Government  has 
no  money  of  its  own  to  put  into  construction  enter- 
prises. It  may  go  into  the  market  like  any  other 
borrower  and  pledge  its  credit  for  the  return  of 
money  lent,  but  whether  the  State  or  the  individual 
borrows,  it  is  private  capital  which  is  borrowed,  and 
to  the  extent  of  the  borrowing  the  capital  fund  is 
reduced.  It  is  urged  that  the  State  can  borrow  more 
cheaply  than  private  individuals,  which  is  true,  but 
that  is  an  added  reason  why  the  entry  of  the  State 
into  the  housing  field  would  drive  out  private  ven- 
tures in  the  same  field. 

STATE   CANNOT  BUILD   ECONOMICALLY 

Even  though  the  State  cannot  build  as  cheaply  as 
the  individual,  it  can  determine  its  own  method  of 
book-keeping,  and  it  can  go  on  indefinitely  making 
bad  investments  without  going  to  the  wall,  as  the 
unsuccessful  private  investor  must  do  under  the 
same  circumstances.  If  the  State  should  drive  the 
private  investor  out  of  the  field,  the  amount  of 


42  THE  HOUSING  FAMINE 

its  borrowing  to  provide  adequate  housing,  would  be 
stupendous.  New  York  City  investors  alone,  before 
the  war,  invested  $75,000,000  annually  in  tenement 
house  and  apartment  house  construction.  This  sum 
did  not  include  the  cost  of  sites.  For  the  whole 
country  at  present  prices,  $2,000,000,000  to  $3,000,- 
000,000  would  be  necessary  as  a  beginning,  according 
to  the  size  of  the  programme  mapped  out,  and  nearly 
$1,000,000,000  annually. 

CONSTITUTIONAL  OBSTACLES  TO   PROMPT  ACTION 

Another  serious  consideration  is  the  delay  attend- 
ant upon  getting  relief  from  such  a  source.  In  most 
states  the  legislature  would  have  to  pass  a  resolution 
authorizing  the  sale  of  bonds,  and  this  resolution 
would  have  to  be  submitted  to  the  people  of  the 
state  at  the  following  election.  Assuming  the  favor- 
able action  of  the  people,  which  is  not  at  all  certain, 
for  it  would  have  to  be  submitted  in  rural  districts, 
where  there  is  no  lack  of  housing,  the  legality  of  the 
issue  of  bonds  (the  interest  on  which  has  to  be 
provided  out  of  taxation),  would  have  to  be  litigated, 
before  any  one  would  buy  them,  for  the  Supreme 
Court  of  the  United  States  has  decided  that  a  citi- 
zen's property  can  only  be  taken  by  taxation  for 
what  is  recognized  as  a  public  use.  The  providing 
of  houses  for  normal,  solvent  citizens  has  never  been 
declared  a  public  use.  There  are  other  points  of 
view  from  which  the  use  of  public  credit  is  unde- 
sirable, but  space  does  not  allow  their  being  set 
forth  here. 


SHALL  PUBLIC  CREDIT  BE  EMPLOYED?       43 

TOPIC    II 
FIRST   ARGUMENT 

By  Edith  Elmer  Wood 

1.  I  favor  federal  and  state  housing  loans,  at  a  low 

rate  of  interest,  to  individual  workingmen  and 
non-commercial  housing  companies. 

2.  Mr.  Murphy's  objections  are  beside  the  mark. 
S.  Mr.  Ackerman  objects  because  it  would  postpone 

his  industrial  revolution. 

TWO  FORMS  OF  HOUSING  LOANS — TO  INDIVIDUAL  WAGE 
EARNERS  AND  TO   LIMITED   DIVIDEND   COMPANIES 

The  employment  of  public  credit  in  housing  is 
what  we  have  defined  as  the  indirect  method  of  state 
action.  It  may  involve  loans  to  individual  workmen 
to  build  their  own  homes,  as  in  Belgium  and  New 
Zealand,  or  loans  to  non-commercial  housing  com- 
panies, as  in  Great  Britain  and  Germany.  We  must 
have  both  kinds. 

WORKINGMAN's  NEED  OF  LONG  TIME  LOANS  AND 
LOW   INTEREST  RATE 

All  governments  approve  of  home  ownership. 
Nearly  all  except  ours  take  practical  steps  to  en- 
courage it.    It  is  a  commonplace  of  political  science! 


44  THE  HOUSING  FAMINE 

that  those  who  own  their  own  homes  make  better 
citizens  than  those  who  do  not,  because  they  have 
more  at  stake  in  the  community.  Bolsheviki  are 
recruited  from  renters. 

The  American  workingman,  far  from  having  pref- 
erential treatment  to  encourage  him  in  acquiring  a 
home,  is  at  a  serious  disadvantage.  Large  and  respon- 
sible purveyors  of  credit  do  not  care  to  be  bothered 
with  him.  He  runs  great  danger  of  falling  into  the 
hands  of  the  usurer  and  the  land  shark.  Home  owner- 
ship is  difficult  enough  for  him  at  best  and  he  ought, 
for  the  public  good  as  well  as  his  own,  to  be  assured 
the  lowest  possible  rate  of  interest,  a  long  time  for 
the  repayment  of  his  loan,  and  complete  protection 
from  fraud  or  exploitation.  These  desiderata  can 
only  be  had  under  government  auspices,  since  they 
involve  the  elimination  of  profit  from  the  lending 
transaction. 

The  best  source  of  credit  for  the  American  work- 
ingman at  the  present  time  is  the  Building  and  Loan 
Association,  but  even  there  he  must  pay  6  per  cent 
interest,  and  his  principal  must  be  repaid  in  200 
monthly  installments  (shortened  to  about  12  years 
by  the  accumulation  of  interest  on  what  has  been 
paid).  In  other  words,  supposing  he  is  lucky  enough 
to  get  a  $3,000  house,  paying  only  ten  per  cent  down, 
it  would  be  rare  indeed  for  him  to  be  able  to  borrow 
90  per  cent  of  the  cost  with  no  security  to  offer  but 
a  mortgage  on  the  property.  But  suppose  he  suc- 
ceeds. His  annual  interest  charges  would  be  $162, 
his  taxes,  insurance  and  repairs  we  will  put  at  4 


SHALL  PUBLIC  CREDIT  BE  EMPLOYED?       45 

per  cent  of  $3,000,  or  $120,  or  a  total  of  $23.50 
monthly,  to  which  we  must  add  $13.50  per  month 
for  Building  and  Loan  Shares,  to  pay  off  his  prin- 
cipal, a  monthly  grand  total  of  $37,  which  the 
majority  of  wage  earners  would  be  utterly  unable 
to  pay.  If  the  interest  were  reduced  to  4  per  cent, 
and  the  time  for  repayment  extended  to  24  years, 
taxes,  etc.,  remaining  as  before  we  should  have  a  total 
monthly  cost  of  $24,  which,  while  still  barring  out 
some  wage  earners,  would  open  up  the  possibilities 
of  home  ownership  to  an  extremely  large  group. 

BELGIAN  SYSTEM   OF  LOANS  TO  WORKINGMEN  l 

One  of  the  best  provisions  of  credit  for  working- 
men's  homes  is  that  afforded  by  the  Belgian  law  of 
1889.  At  first  it  provided  for  5  per  cent,  later  for 
7y2  per  cent  of  the  deposits  of  the  General  Savings 
Bank  being  lent  to  non-commercial  loan  associations, 
which,  in  turn,  make  loans  to  workingmen  to  build 
or  purchase  a  home.  Loans  may  run  for  25  years. 
The  rate  of  interest  has  been  from  Sy2  to  4  per  cent 
to  the  workingmani  Payments  of  interest  and  prin- 
cipal, and  insurance  on  the  workingman's  life  for 
the  unpaid  balance,  are  made  in  equal  installments, 
monthly  or  weekly.  Up  to  the  outbreak  of  the  war 
54,632  Belgian  workingmen  had  become  home  owners 
through  the  operation  of  this  law. 

NEW    ZEALAND    SYSTEM   OF    LOANS  TO  WORKINGMEN1 

Better  still,  perhaps,  is  the  New  Zealand  system, 
since  it  eliminates  the  loan  association.    The  State 


46  THE  HOUSING  FAMINE 

Advances  Office  lends  directly  to  the  workingman 
at  4i^  per  cent,  and  repayment  may  be  spread  over 
S6y2  years.  The  money  is  provided  by  a  bond  issue. 
The  borrower  may  be  "any  person  employed  in 
manual  or  clerical  labor  who  is  not  in  receipt  of 
an  income  of  more  than  200  pounds  per  annum  and, 
is  not  the  owner  of  any  land  other  than  the  allotment 
on  which  it  is  proposed  to  build,"2  which  he  must 
own. 


BRITISH   AND   GERMAN   SYSTEM   OF  LOANS 
TO   HOUSING    COMPANIES  l 

Even  more  has  been  done  abroad  by  loans  to  non- 
commercial housing  companies  than  by  loans  to  in- 
dividual workingmen.  Great  Britain  and  Germany 
have  followed  this  policy  on  an  extensive  scale,  and 
have  been  copied  by  France,  Italy,  Austria,  Canada, 
and  numerous  other  countries. 

The  housing  company  may  be  a  co-operative  or- 
ganization of  workingmen,  or  a  philanthropic  or  civic 
corporation.  Many  of  the  housing  companies 
founded  by  our  Chambers  of  Commerce  or  by  em- 
ployers could  qualify  in  the  latter  class.  The  United 
States  Shipping  Board  during  the  war  pursued  an 
emergency  form  of  this  policy. 

1  See  Housing  of  the  Unskilled  Wage  Earner,  Chap.  V,  and  U.  S. 
Bureau  of  Labor  Statistics  Bulletin,  158. 

*  New  Zealand  Official  Year  Book  for  1916,  p.  636. 


SHALL  PUBLIC  CREDIT  BE  EMPLOYED?       47 


TOPIC    II 
FIRST   ARGUMENT 

By  Frederick  Ackerman 

1.  Use  of  public  credit  admission  of  breakdown  of 

financial  business  system.  Would  end  in  de- 
preciation of  Government  securities  and  more 
inflation.    A  futile  measure. 

2.  Mrs.  Wood's  proposals  are  subventions  made  with 

view  of  retaining  losses  consequent  upon  system 
of  price  competition.    Would  not  work  anyway. 

3.  Mr.  Murphy  and  I  agree;  but  through  different 

reasoning. 

The  use  of  public  credit  as  a  means  toward  provid- 
ing adequate  housing  accommodations  for  wage 
workers  is  first  of  all  to  be  interpreted  as  a  fairly 
clear  indication  of  the  fact  that  the  modern  indus- 
trial system  is  incapable  of  performing  what  is  now 
rated  by  all  hands  as  an  extremely  important  func- 
tion. 

Therefore,  and  without  further  argument,  we  may 
admit  that  the  use  of  public  credit  is  to  be  viewed 
as  in  the  nature  of  a  subsidy  to  that  system  of  pro- 
duction which  operates  through  a  system  of  loan 


48  THE  HOUSING  FAMINE 

credit,  price  competition  and  a  consequent  due 
regard  to  the  curtailment  of  product.  That  is  to 
say,  a  subsidy  to  that  system  which  can  only  operate 
when  it  keeps  prices  up  by  keeping  production  down. 

WHY    GO   IN   A    CIRCLE? 

Of  course,  the  introduction  of  public  credit  to 
stimulate  the  erection  of  habitations  for  the  wage 
workers  might  prolong  the  life  of  the  present  sys- 
tem, the  inefficiency  of  which  is  plainly  acknowl- 
edged by  the  advocacy  of  a  resort  to  public  credit 
to  help  it  to  function.  Precisely  what  would  be 
gained  in  the  long  run  by  the  adoption  of  such 
policy  is  not  very  clear.  It  looks  as  if  following 
such  a  course  of  action  would  bring  us  in  due  time 
around  to  the  point  of  departure. 

It  is  fair  to  assume  that  any  plan  looking  forward 
the  use  of  public  credit  to  stimulate  the  production 
of  buildings  of  a  certain  class,  would  contain  certain 
restrictive  provisions  regarding  the  character  of 
buildings,  conditions  with  respect  to  location,  etc.; 
and  it  is  likely  that  its  use  would  also  be  restricted 
to  some  sort  of  "non-profit"  enterprise,  that  is  to 
say,  it  would  not  be  handed  out  freely  to  be  used 
for  speculative  purposes ;  and  of  course  interest  rates 
would  have  to  be  "nominal"  if  anything  were  to  be 
gained  by  such  action.  The  reasons  for  attaching 
such  restrictions  to  its  use  are  so  obvious  as  not  to 
require  discussion. 

And  it  is  likewise  obvious  that  if  any  appreciable 


SHALL  PUBLIC  CREDIT  BE  EMPLOYED?       49 

volume  of  such  public  credit  be  used  for  the  building 
of  homes  for  wage  workers,  no  other  credit  would 
flow  into  building  operations  of  the  same  general 
class.  That  is  to  say,  private  enterprise  would  ulti- 
mately be  forced  to  withdraw  from  this  field  of 
action;  and  as  a  consequence  the  entire  burden  of 
building  homes  for  the  wage  workers  would  fall 
upon  the  shoulders  of  the  State. 

WHY  MOBE   INFLATION? 

Such  a  plan  would  be  likely  to  " start  something/' 
Let  us  see !  The  volume  of  funds  required  to  carry 
out  such  a  programme,  were  the  State  to  provide  the 
entire  volume  of  credit  in  the  form  of  loans  to 
municipalities,  "non-profit"  enterprises,  etc.,  would 
amount  to  a  very  considerable  sum.  Presumably 
this  considerable  sum  would  have  to  be  secured  from 
the  sale  of  municipal,  state  or  federal  bonds.  Thus 
we  would  bring  this  whole  enterprise  into  competi- 
tion with  the  sale  of  securities  for  all  of  those  private 
enterprises  which  promise  not  alone  a  normal  rate 
of  interest,  but  a  large  profit  as  well.  There  could 
be  but  one  outcome  in  pursuing  such  a  policy.  Gov- 
ernment securities  would  decline  in  value  as  our 
enterprise  grew  in  volume.  The  result  would  be 
inflation.  We  should  be  satisfied  with  the  present 
conditions  in  this  respect.  If  there  still  be  doubt  as 
to  the  validity  of  the  theory  thus  presented,  a  look 
in  upon  the  British  scene  would  satisfy  any  one. 
Great  Britain  has  passed  through  this  period  of  com. 


50  THE  HOUSING  FAMINE 

munistic  action  confined  to  consumption  in  competi- 
tion with  an  investment  for  profit  competitive  system 
of  production  and  has  now  reached  the  point  where 
an  outright  subsidy  of  £250  per  house  will  not  start 
the  production  of  houses. 

WHAT   LOAN    CREDIT   ACCOMPLISHES 

But  the  real  question  involved  on  this  head  is  not 
a  matter  of  choosing  between  the  use  of  public  or 
private  credit;  it  is  rather  a  question  as  to  what 
is  the  function  of  loan  credit.  A  century  and  a 
half  of  almost  unhampered  experiment  has  brought 
a  great  many  people  to  the  point  of  saying  that, 
as  a  general  proposition,  the  only  function  of  loan 
credit  is  to  transfer  the  right  to  use  material  and 
services  from  one  person  to  another.  If  this  be  the 
case,  then  the  adoption  of  the  plan  of  using  state 
credit  would  not  help  a  great  deal  in  producing 
homes  for  the  people. 


SHALL  PUBLIC  CREDIT  BE  EMPLOYED?      51 


TOPIC   II 
SECOND   ARGUMENT 

By  John  J.  Murphy 

MISTAKEN   VIEW   OF   PUBLIC   CREDIT 

In  the  discussion  of  this  subject,  I  find  my  oppo- 
nents completely  at  variance.  Clearly  public  credit 
may  be  employed  directly  by  public  authorities,  or 
indirectly  by  lending  money,  borrowed  by  the  public, 
to  associations  or  individuals  proposing  to  engage 
in  individual  house  production  or  building  on  a  large 
scale.  I  stand  between  the  two  extreme  positions. 
Government  is  largely  responsible  for  the  predica- 
ment in  which  we  find  ourselves  due  to  its  sins  of 
omission  and  commission.  It  is  the  agent  of  society, 
or  at  least  that  part  of  society  that  has  the  intel- 
ligence, energy  and  resources  to  make  its  will  im- 
pressive. It  may  fairly  be  called  upon  to  aid  in 
remedying  some  of  the  consequences  of  its  own 
errors. 

Defects  in  banking  system 

Among  these  is  a  banking  system  which  tends  to 
divert  the  great  volume  of  available  capital  into 


52  THE  HOUSING  FAMINE 

short  term  loans,  which,  as  they  offer  larger  returns 
are  sought  in  preference  to  the  long  term  loans  which 
building  requires.  An  amendment  is  now  proposed 
to  the  Federal  Keserve  Act,  requiring  national  banks 
which  maintain  savings  bank  departments  to  invest 
all  savings  in  such  forms  of  securities  as  may  be 
directed  by  the  Federal  Eeserve  Board.  The  object 
of  the  amendment  is  the  adequate  protection  of  the 
interests  of  depositors.  Its  effect  will  be  the  diver- 
sion of  more  than  $2,000,000,000  from  short  term 
loans  to  long  term  investments  in  construction  enter- 
prises. This  sum  is  equal  to  the  present  combined 
assets  of  the  building  and  loan  associations  of  the 
United  States.  If  this  measure  is  adopted,  it  will 
go  a  long  way  toward  accomplishing  all  that  the 
extension  of  public  credit  might  be  expected  to  do, 
and  do  it  in  a  much  better  and  safer  way. 

HOW  CAN  PROPER  VALUATION  BE  OBTAINED? 

The  history  of  direct  loans  by  the  State,  in  any 
of  its  various  guises,  to  private  individuals  or  cor- 
porations is  not  encouraging.  Problems  of  valuation 
arise,  which  it  is  difficult  for  private  firms,  with  all 
the  incentive  of  private  interest,  to  properly  control ; 
it  would  be  entirely  impossible  for  public  officials 
to  prevent  grave  scandals.  Yet,  with  all  its  draw- 
backs, it  would  have  some  advantage  over  direct 
action  by  the  state.  In  1836,  the  State  of  New  York 
received  from  the  United  States  over  $5,000,000,  as 
its  share  of  a  surplus  then  in  the  United  States 


SHALL  PUBLIC  CREDIT  BE  EMPLOYED?       53 

treasury,  not  altogether  as  a  gift,  but  a  fund  to  be 
used  for  the  benefit  of  schools  and  education.  The 
Federal  Government  is  empowered  to  ask  for  an 
accounting  at  any  time,  but  has  not  done  so  to  date. 
The  fund  was  to  be  invested  in  improved  real  estate. 
Most  of  it  is  irrecoverable.  The  enforcement  of  pay- 
ment of  obligations  due  the  government  is  always 
a  tedious  and  unpopular  process. 

LABOR  COLD  TO  HOME-OWNING 

A  factor  which  must  be  given  due  weight  in  the 
consideration  of  this  feature  of  the  case  is  the  opposi- 
tion to  home-owning  which  is  shown  by  some 
branches  of  organized  labor.  Their  point  of  view 
is  quite  defensible,  on  account  of  the  uncertainty  of 
permanent  employment,  which  has  hitherto  char- 
acterized so  many  trades.  The  possession  of  a  home 
with  a  mortgage  on  it  diminished  the  workman's 
mobility,  and  often  prevented  him  from  carrying  his 
labor  to  the  best  market,  while  in  the  event  of 
strikes,  he  became  timid  for  fear  of  losing  the  in- 
terest which  he  had  already  acquired.  Until  condi- 
tions change  so  that  this  attitude  changes,  the  num- 
ber of  home-owning  mechanics  is  not  likely  to  greatly 
increase. 

THE   "  OWN-YOUK-HOME  "   MOVEMENT 

The  Own-Your-Home  movement  deserves  encour- 
agement, but  its  task  has  been  made  difficult  by  the 
suspicion  which  has  been  engendered  that  all  organ- 


54  THE  HOUSING  FAMINE 

ized  propaganda  has  ulterior  motives.  This  frame  of 
mind  is  one  of  the  most  marked  aftermaths  of  the 
war.  A  number  of  people  who  have  some  money 
saved  are  going  into  house  building  for  themselves, 
but  they  are  not  the  people  whose  need  is  greatest. 
We  must  produce  housing  at  wholesale  for  a  good 
while  to  come,  and  commendable  as  are  the  efforts 
of  building  and  loan  associations,  they  will  not  sup- 
ply more  than  a  fraction  of  the  actual  needs  of  the 
community.  So  the  use  of  public  credit  will  not  meet 
the  emergency,  whether  used  directly  or  lent  to 
others,  unless  we  can  stimulate  or  revive  the  normal 
courses  of  supply,  private  initiative  and  private  in- 
vestment. 


SHALL  PUBLIC  CREDIT  BE  EMPLOYED?       55 


TOPIC  II 
SECOND  ARGUMENT 

By  Edith  Elmer  Wood 

what  is  public  credit? 

The  very  first  sentence  in  Mr.  Murphy's  statement 
is  productive  of  something  like  despair.  If  so  em- 
inent an  advocate  of  individualism  is  guilty  of  such 
confusion  of  ideas,  what  can  we  expect  of  the  or- 
dinary run  of  them?  He  says  we  ought  not  to  have 
public  credit  for  housing  because  of  "the  wasteful 
manner  in  which  public  money  is  usually  expended.' ' 
What  does  he  think  public  credit  is? 

Does  he  suppose  that  a  workingman  who  borrows 
$3,000  from  a  government  housing  fund  to  build 
himself  a  home,  is  thereby  infected  with  extrava- 
gance? Would  it  be  better  for  him  to  borrow  from 
the  usurer  Mr.  Murphy  admits  is  lying  in  wait? 
What  does  Mr.  Murphy  think  of  the  Federal  Farm 
Loan  Act?  Does  he  claim  that  it  has  fostered  ex- 
travagance among  farmers? 

Or  is  it  simply  that  government  loans  and  govern- 
ment housing  present  themselves  so  nebulously  to  his 
mind  that  he  makes  no  distinction,  between  them? 


56  THE  HOUSING  FAMINE 

THE   STATE   WILL   DRIVE   OUT   PRIVATE   ENTERPRISE 

Mr.  Murphy  says,  "The  entry  of  the  state  into  the 
housing  (loan?)  field  would  drive  out  private  ven- 
tures in  the  same  field."  But  there  are  no  private 
ventures  in  the  field  where  we  want  government 
loans  to  operate — the  field  of  providing  homes  for 
low-paid  wage  earners.  There  have  been  none  for 
many  years,  if  ever.  Is  private  business  initiative 
such  a  dog-in-the-manger  that  it  will  neither  extend 
credit  itself  to  the  workingman,  nor  suffer  him  to 
get  it  in  any  other  way?  We  do  not  for  a  moment 
advocate  indiscriminate  government  loans. 

MR.    ACKERMAN   ADMITS   BENEFICENT   EFFECT 
OF   GOVERNMENT   LOANS 

Mr.  Ackerman  says  he  is  opposed  to  government 
housing  loans  because  they  would  prolong  the  life  of 
the  present  industrial  system.  In  other  words,  he 
admits  that  they  would  improve  the  living  conditions 
of  workingmen  and  therefore  objects.  He  wants  all 
the  bad  features  of  the  present  conserved,  in  order  to 
hasten  our  arrival  at  the  revolution  point. 

HOW  LARGE  WOULD  BE  THE   FIELD  OF 
GOVERNMENT  CREDIT? 

He  says  if  we  had  government  loans,  "no  other 
credit  would  flow  into  building  operations  of  the 
same  class."  But,  as  has  just  been  pointed  out  to 
Mr.  Murphy,  we  are  only  proposing  government 


SHALL  PUBLIC  CREDIT  BE  EMPLOYED?       57 

credit  for  those  groups  toward  whom  no  credit  what- 
ever is,  or  has  been,  flowing. 

No  one  knows  exactly  how  large  is  that  section  of 
the  population.  Government  credit  probably  cannot 
supply  it  all.  But  if  it  ultimately  supplies  one-tenth 
of  all  the  people,  which  is  by  no  means  beyond  the 
bounds  of  possibility,  the  worst  of  the  old  houses  can 
be  vacated,  and  the  up-keep  standard  of  the  others 
will  necessarily  be  raised. 

Mr.  Ackerman  is  right  in  calling  attention  to  the 
bad  results  of  issuing  too  many  housing  bonds  at 
once.  Fortunately  it  is  quite  possible  to  avoid  this 
danger. 

BRITISH   HOUSING   SUBSIDIES 

As  to  the  present  (temporary)  British  policy  of 
housing  subsidies,  I  am  not  advocating  anything  of 
the  sort  for  the  United  States.  I  do  not  believe  the 
emergency  calls  for  it.  Mr.  Ackerman  says  we  will 
come  to  it,  if  we  adopt  a  housing-at-cost  policy, 
because  the  British  had  an  at-cost  system  before  the 
war.    Post  hoc,  ergo  propter  hoc. 


58  THE  HOUSING  FAMINE 


topic  n 

SECOND  ARGUMENT 

By  Frederick  L.  Ackerman 

MR.    MURPHY   DISCOVERS   A    MOTE 

While  Mr.  Murphy  and  I  are  plainly  moving  in 
opposite  directions  in  our  argument,  yet  we  pass  this 
point  in  the  debate  without  collision.  Both  conclude 
that  public  credit  should  not  be  employed. 

He  makes  one  statement,  however,  in  his  argument 
which  bears  a  little  looking  into.  He  says,  "the 
difficulties  of  obtaining  money  for  housing  loans  is 
not  that  lenders  are  unwilling  to  put  money  into 
building,  but  they  are  unwilling  to  advance  as  high 
a  percentage  ...  as  they  did  hitherto  .  .  .  They 
fear  ...  a  depreciation."  A  man  desiring  to  secure 
a  loan  and  having  tried  repeatedly  to  secure  a  loan 
would  put  it  in  this  fashion:  "I  saw  the  Controller 
and  he  said  nothing  doing."  I  suspect — I  really  be- 
lieve— that  Mr.  Murphy  has  provided  me  with  a 
very  fortunate  illustration  of  what  I  have  repeatedly 
referred  to  as  blameless  sabotage — which  of  course 
is  very  much  to  the  point  as  regards  my  main  con- 
tention,    I  ask  a  question:  is  not  this  hesitating 


SHALL  PUBLIC  CREDIT  BE  EMPLOYED?       50 

attitude  on  the  part  of  the  lenders  to  be  viewed  as 
blameless  sabotage — one  of  the  inevitable  conse- 
quences of  our  system  of  investment  for  a  profit — 
price  competition? 

But  since  Mr.  Murphy  agrees  with  me  that  public 
credit  should  not  be  employed,  we  may,  therefore, 
proceed  immediately  to  Mrs.  Wood's  argument. 

WHAT  WERE  THE  ACTUAL  RESULTS? 

Mrs.  Wood's  argument  upon  this  head  is  mainly  a 
statement  of  what  has  been  done  by  way  of  legis- 
lation looking  toward  the  use  of  public  credit.  Mrs. 
Wood  has  little  to  say  about  the  actual  conditions 
which  obtained  prior  to  the  war  in  the  various  coun- 
tries which  she  mentions  as  having  resorted  to  the  use 
of  public  credit  to  solve  the  housing  problem.  Actual 
conditions  in  1913  as  regards  the  then  accumulating 
shortage  of  houses  in  the  countries  mentioned  should 
shed  light  upon  the  question.  Her  statement  of  the 
case  leads  one  to  assume  that  the  housing  problem 
must  have  been  moving  toward  solution  wherever  the 
use  of  public  credit  had  been  employed.  It  is  there- 
fore that  I  ask:  What  was  the  actual  drift  of  events 
in  this  connection  in  these  countries  mentioned,  say, 
in  1913?  Was  the  shortage  of  houses  accumulating 
or  decreasing? 

WHY   PICK   ON   ONE   PROFITEER 

But  it  is  clearly  evident  that  Mrs.  Wood  recognizes 
and  names  one  of  the  underlying  difficulties  in  the 


60  THE  HOUSING  FAMINE 

present  situation,  for  she  says  "  these  desiderata  can 
only  be  had  under  Government  auspices  since  they 
involve  the  elimination  of  profit  from  the  lending 
transaction. M  It  is  clearly  evident  that  the  elimination 
of  profit  appeals  to  Mrs.  "Wood  as  an  important  factor. 
I  must  therefore  ask:  If  it  is  desirable  to  eliminate 
profit  from  the  "lending  transaction' '  which  she  refers 
to,  why  it  is  not  likewise  quite  as  desirable  to  eliminate 
profit  from  the  various  other  "lending  transactions" 
all  down  the  line  in  the  fabrication  of  materials  and 
in  the  use  of  land.  "Why  pick  on  one  (blameless) 
profiteer? 

ONLY   A   MAKE   BELIEVE 

The  scheme  which  Mrs.  Wood  advocates  is  not  built 
upon  a  very  firm  foundation,  for  it  allows,  as  I  have 
already  pointed  out,  the  whole  list  of  wastes,  curtail- 
ments and  cancellations  of  effort  which  take  place 
inevitably  in  our  system  of  production  conceived  in 
terms  of  investment  for  a  profit  and  price  competition. 
What  her  scheme  accomplishes  of  course  is  the  appar- 
ent elimination  of  one  of  the  wastes,  that  is  to  say  one 
of  the  profit  transactions.  But  is  it  not  true  that  this 
elimination  is  proposed  in  order  that  we  may  retain 
the  entire  list  of  profit  transactions,  wastes  and  cur- 
tailments which  take  place  in  our  system  of  production 
animated  by  investment  for  a  profit? 


SHALL  PUBLIC  CREDIT  BE  EMPLOYED?       61 


TOPIC  II 

THIRD  ARGUMENT 

By  John  J.  Murphy 
Answering  Mrs.  Wood: 

PUBLIC   CBEDIT  MERELY   POWER  TO  RAISE  MONEY 

Misapprehensions  due  to  use  of  words  or  phrases 
are  more  or  less  inevitable.  Mrs.  Wood  deems  me 
ignorant  of  the  meaning  of  public  credit.  I  have  to 
retort  that  she  limits  it  in  a  manner  which  nothing 
in  our  topic  suggests.  Public  credit  is  the  ability  of 
Federal,  State  or  Municipal  authorities  to  borrow 
money.  The  money  when  borrowed  may  be  used 
either  by  the  public  directly,  as  in  construction  of 
subways  or  reservoirs,  or  it  may  be  lent,  after  amend- 
ment of  the  constitution,  to  individuals  in  the  man- 
ner which  Mrs.  Wood  evidently  has  in  mind.  I  am 
not  responsible  for  the  limitations  which  she  attaches 
to  phrases  which  have  a  wider  significance.  Had  our 
topic  read,  "  Shall  we  employ  Government  loans  V9 
that  would  have  been  a  different  matter. 

REASONABLE  PROFIT  POSSIBLE  IN  BUILDING 
CHEAP  DWELLINGS 

It  is  not  in  accord  with  the  facts  to  state  that  therei 
have  been  no  private  ventures  in  the  field  of  pro- 


62  THE  HOUSING  FAMINE 

viding  homes  for  low-paid  wage  earners.  During 
the  past  fifteen  years  not  less  than  $400,000,000 
has  been  put  into  tenement  houses,  where  rents  did 
not  exceed  $25  per  month,  in  New  York  alone. 
Hundreds  of  such  houses  where  rents  of  apartments 
did  not  exceed  $15  were  erected.  Similar  construc- 
tion has  gone  on  in  other  large  cities. 

DANGERS  OF  GOVERNMENT  INTERVENTION 

As  regards  advances  for  home  building.  Outside 
of  ordinary  business  channels  it  is  a  dangerous  finan- 
cial experiment.  Can  Government  evict  people  who 
do  not  pay?  Legally  and  physically,  yes,  but  actually 
it  is  extremely  doubtful.  A  big  local  political  issue 
can  always  be  made  out  of  proposals  to  compel  people 
to  live  up  to  their  obligations  to  Government.  It  is 
about  as  hard  to  enforce  Government's  claims 
against  a  group  of  citizens,  as  it  is  to  enforce  a 
citizen's  claim  against  Government. 

As  to  Mr.  Ackerman: 

REFUSAL  TO  LEND  DUE  TO  FEAR  OF 
FUTURE  DROP  IN  VALUES 

His  criticism  of  my  stand  on  this  subject  is  not 
very  searching.  I  do  not  believe  that  the  refusal  of 
great  organizations  of  capital  to  lend  on  housing  as 
large  a  percentage  as  usual,  is  based  on  wrong 
motives.  The  future  drop  in  values  to  a  greater  or 
less  extent  is  inevitable,  as  many  see  it.  Many  big 
institutions  are  lenders  of  trust  funds.  No  one  can 
properly  criticise  their  taking  an  attitude  of  caution. 


SHALL  PUBLIC  CREDIT  BE  EMPLOYED?       63 


TOPIC  II 
THIRD  ARGUMENT 

By  Edith  Elmer  Wood 

we  welcome  mr.  murphy  to  our  ranks 

Mr.  Murphy  is  a  homeopathist  in  social  economy. 
He  lays  all  our  ills  to  Government,  and  has  recourse 
to  more  Government  for  a  cure.  He  does  me  the 
honor  to  advocate  legislation  releasing  national  bank 
deposits  for  housing  loans,  which  he  will  find  sug- 
gested in  my  book,  The  Housing  of  the  Unskilled  Wage 
Earner* 

There  are  two  differences  in  our  plans,  however. 
Mr.  Murphy  outherods  Herod  by  making  the  loans 
compulsory,  and  he  lays  no  restriction  on  the  bene- 
ficiaries. That  bars  out  the  workingman.  We  both 
know  there  is  not  enough  credit  from  this  source  to 
build  houses  for  everybody.  The  question  is :  Shal] 
we  steer  it  to  those  who  have,  or  to  those  who  have 
not? 

ASSERTION   IS   NOT   PROOF 

Mr.  Murphy  says  "The  history  of  direct  loans  by 
the  state  is  not  encouraging."    To  me  it  is  extremely 


64  THE  HOUSING  FAMINE 

encouraging.  He  says  "It  would  be  impossible  for 
public  officials  to  prevent  grave  scandals.' '  To  what 
grave  scandals  can  he  point  in  the  administration 
of  the  Belgian  Housing  Act?  The  New  Zealand 
Advances  to  Workers  Act  ?  The  British  Housing  of 
the  Working  Classes  Acts?  In  the  French,  German, 
Italian  or  Norwegian  loans?  Or  our  own  Federal 
Farm  Loans? 

A  PLEASURE  TO  ANSWER   QUESTIONS 

I  grant  Mr.  Ackerman  my  proposal  eliminates  only 
the  final  profit,  but  the  elimination  is  entirely  real, — 
not  apparent  as  he  calls  it. 

Replying  to  his  question:  The  housing  problem 
was  moving  toward  a  solution  in  various  countries 
in  1913  just  about  in  proportion  to  the  extent  to 
which  public  credit  was  being  used. 

*  Housing  Loans  by  National  Banks,  pp.  267,  268. 


SHALL  PUBLIC  CREDIT  BE  EMPLOYED?       65 


topic  n 

THIRD  ARGUMENT 

By  Frederick  L.  Ackerman 

MRS.   WOOD  TRUSTS  AGAIN.      PUBLIC   CREDIT 
NOT  SUFFICIENT  TO   START  THE   GAME 

Mrs.  Wood  counters  my  main  argument — my  ob- 
jection to  the  use  of  public  credit,  by  saying:  "For- 
tunately, it  is  quite  possible  to  avoid  this  danger." 
She  does  not  make  it  clear  as  to  how  this  danger  could 
be  avoided.  My  contention  is  that  it  cannot  be 
avoided,  since  the  volume  of  securities  required,  if 
any  appreciable  change  were  to  be  effected,  would 
have  to  be  very  considerable.  We  should  be  suf- 
ficiently familiar  with  the  results  of  constantly  ex- 
tending the  volume  of  credit. 

IT  WILL  NOT  WORK  ANYWAY 

Mrs.  Wood  states  that  she  is  not  advocating  any- 
thing like  the  "present  (temporary)  British  policy 
of  housing  subsidies.' '  Now,  it  is  notorious  that 
after  eliminating  the  profit  of  the  speculator,  we 
cannot  provide  houses  for  the  lower  paid  wage 
worker  for  a  rent  which  he  can  afford  to  pay  and  at 


66  THE  HOUSING  FAMINE 

the  same  time  provide  for  the  interest  and  amortiza- 
tion of  the  investment.  From  the  data  available  as 
regards  cost  of  building  and  the  rent  which  the  lower 
paid  wage  worker  can  pay,  it  is  clearly  evident  that 
we  would  be  required  to  provide  a  subsidy  approxi- 
mating that  which  I  referred  to  in  connection  with 
the  present  scheme  of  housing  in  Great  Britain.  It 
therefore  looks  to  me  as  if  we  would  of  a  necessity 
have  to  start  with  an  outright  subsidy  to  build  the 
first  house. 

NOT  MUCH   OF  AN   ARGUMENT 

I  do  not  admit  that  the  use  of  public  credit,  while 
prolonging  the  life  of  the  present  wasteful  industrial 
system,  would  improve  the  living  conditions  of  the 
workers.  I  did  not  suggest  that  I  "want  all  of  the 
bad  features  of  the  present  conserved."  My  con- 
tention is  that  nothing  of  any  importance  can  pos- 
sibly be  accomplished  by  the  indirect  methods  sug- 
gested by  Mrs.  Wood,  since  they  in  nowise  aim  at 
modifying  the  conditions  which  operate  to  bring  about 
the  conditions  of  mal-adjustment.  I  hold  that  for 
the  reasons  repeatedly  stated,  the  modern  industrial 
system  cannot  "come  across  with  the  goods.' 9 


TOPIC  III 
SHALL  WE  HAVE  MUNICIPAL  HOUSING? 


topic  in 

FIRST  ARGUMENT 

By  John  J.  Murphy 

1.  I  oppose  municipal  operation  of  housing  as  a  pub- 

lic utility.  Such  experiments  hare  always 
proven  wasteful  and  costly  as  compared  with 
similar  private  undertakings. 

2.  Mrs.  Wood  thinks  that  so-called  lower  paid  wage 

earners  would  like  to  live  in  artisan's  dwellings, 
as  they  are  called  in  Europe.    I  don't. 

3.  Mr.  Ackerman  thinks  such  a  plan  would  increase 

congestion.    I  differ  with  him. 

A  SPECIOUS  PROPOSITION 

At  first  glance  there  seems  much  to  be  said  in  favor 
of  making  the  housing  problem  a  matter  for  direct 
action  by  the  municipality.  Does  not  the  city,  as  a 
matter  of  self-protection,  provide  alms-houses,  hos- 
pitals, jails?  If  it  provides  shelters  for  the  paupers, 
criminals,  and  vagrants,  why  not  for  average  citizens 
unable  to  find  a  home?  There  is  a  curious  quality 
of  character,  called  self-respect,  which  causes  the 
average  citizen  to  hesitate  about  enrolling  himself 


70  THE  HOUSING  FAMINE 

among  the  defectives  and  delinquents.  Artisans' 
dwellings,  to  a  very  limited  extent,  have  existed 
abroad  and  mechanics  dwell  in  them,  but  in  Europe 
there  is  a  very  general  recognition  of  the  fact  that 
large  portions  of  the  population  are  living  on  wages 
below  the  living  level.  Here,  whatever  may  be  the 
truth,  such  a  condition  is  not  accepted  by  our  citizens 
to  any  great  extent. 


If  we  may  judge  by  all  precedents  established  in 
municipal  construction,  the  great  mass  of  such  build- 
ings would  be  politically  constructed.  The  land 
would  be  purchased  from  the  owner  having  the 
greatest  pull,  at  a  price  determined  by  the  size  of  the 
city's  pocket  book,  the  building  would  be  constructed 
of  expensive  material  and  in  leisurely  manner,  and 
on  an  arbitrary  plan,  embodying  the  view  of  some 
eminent  architect  who  knows  how  the  people  should 
live  rather  than  how  they  want  to  live. 

WILL   COST  MORE  THAN   PRIVATE   CONSTRUCTION 

When,  after  a  couple  of  years,  which  is  the  shortest 
time  in  which  municipal  buildings  are  ever  con- 
structed, they  are  opened  to  occupancy,  if  they  are 
rented  for  enough  to  provide  a  fair  return  on  costs 
of  construction,  etc.,  they  will  not  provide  homes  for 
our  poor  citizens,  because  they  will  cost  more  than 
privately  erected  buildings.  If  they  are  cut  down 
to  a  rent  regardless  of  cost,  which  the  tenant  can 


SHALL  WE  HAVE  MUNICIPAL  HOUSING?      71 

afford  to  pay,  it  will  mean  that  the  whole  housing 
programme  for  the  city  will  be  left  to  the  city, 
except,  perhaps,  the  construction  of  very  expensive 
apartments.  Can  any  one  doubt,  if  the  occuancy 
of  such  buildings  would  confer  any  special  advantage 
on  the  tenant,  that  they  would  constitute  a  very 
subtle  form  of  political  patronage? 

THE   PROPER  FIELD  OF  MUNICIPAL   OPERATION 

Municipal  ownership  and  operation  has  its  proper 
field.  It  may  be  properly  utilized  whenever  any 
public  service  needing  for  its  performance  the  use 
of  public  property  is  to  be  rendered  to  citizens  in 
common.  "Water,  light  and  transportation  supply  are 
examples  in  this  category,  in  normal  times.  Emer- 
gency housing  in  times  of  catastrophe  is  of  course 
included  in  this  consideration. 

LIMITED   BORROWING   POWER 

It  must  not  be  overlooked  that  any  programme  of 
municipal  ownership  and  operation  confronts  at  the 
outset  the  problem  of  finance.  Our  cities  are  limited 
in  borrowing,  usually  by  the  state  constitutions,  to 
ten  per  cent  of  the  value  of  real  estate  assessed  for 
purposes  of  taxation.  Some  states  limit  their  cities 
even  more  rigidly.  A  glance  over  the  figures  of 
city  debts  indicates  that  many  cities  in  the  nation 
have  already  borrowed  nearly  all  they  are  entitled 
to,  so  that  any  such  programme  as  would  be  involved 
in  the  municipal  ownership  and  operation  of  hous- 


72  THE  HOUSING  FAMINE 

ing  could  only  be  undertaken  after  long  delay.  And 
we  are  dealing  with  a  situation  which  calls  for  a 
prompt  solution ;  but  it  must  not  be  a  solution  which 
leaves  the  patient  worse  off  than  he  was  when  the 
treatment  was  administered. 

FAILURE  OF  ATTEMPTS  TO  REGULATE  PRICES 

Men  of  judgment  must  admit  that  whenever  the 
state  attempts  things  outside  of  the  comparatively 
narrow  range  of  functions,  which  are  its  proper 
province,  it  makes  a  poor  showing.  When  it  at- 
tempts to  regulate  prices,  it  can  prevent  the  sale  of 
articles  at  prices  above  the  maximum  which  it  fixes, 
but  it  cannot  bring  it  about  that  any  articles  shall  be 
sold  at  all.  Recently  it  attempted  to  control  the 
price  of  sugar,  with  the  result  that  sugar  became 
practically  unobtainable.  When  the  ban  was  taken 
off,  sugar  became  purchasable,  though  at  a  higher 
price.  As  a  preventive  force  Government  is  all  pow- 
erful; as  a  constructive  force  it  is  negligible, 


SHALL  WE  HAVE  MUNICIPAL  HOUSING?      73 


TOPIC  III 
FIRST  ARGUMENT 

By  Edith  Elmer  Wood 

1.  I  favor  the  supply  of  houses  to  lower-paid  wage 

earners  by  municipalities  as  a  self-supporting 
public  utility. 

2.  Mr.  Murphy's  objections  are  based  on  miscon- 

ception of  service  rendered  and  distrust  of 
American  public  officials. 

3.  Mr.  Ackerman  vanquishes  several  straw  men  of 

his  own  creating. 

WHY   IT   IS   NECESSARY 

Whether  we  like  it  or  not,  we  must  resort  to 
municipal  housing,  unless  we  can  dam  the  flood  of 
modern  tendency  (with  something  more  than  words) 
so  as  to  halt  the  growth  of  cities,  or  unless  wa  are 
willing  to  condemn  an  ever  increasing  section  of 
their  population  to  a  soul  and  body  stunting  life 
under  conditions  of  constantly  increasing  congestion, 
till,  like  Glasgow  and  Dublin,  more  than  a  fourth 
of  the  population,  or  like  Berlin,  nearly  half  of  it, 
live  in  one-room  tenements.1 


74  THE  HOUSING  FAMINE 

In  great  cities  there  is  always  a  considerable 
element  lacking  the  initiative  and  the  resources  to 
arrive  at  home  ownership  under  the  most  favorable 
state-loan  conditions.  Public  welfare  housing  com- 
panies will  reach  only  a  fraction  of  them.  City  hous- 
ing, at  cost,  is  their  only  salvation. 

BRITISH  EFFORTS  TO  AVOID  IT 

If  ever  a  people  were  wedded  to  the  philosophy  of 
individualism,  laissez-faire,  and  business  initiative,  it 
was  the  British.  But  when  they  found  that  families 
living  in  the  London  slums  became  extinct  in  three 
generations,  and  that  the  second  generation  was  unfit 
for  the  recruiting  sergeant,  they  woke  up.  They  saw 
that,  for  a  considerable  segment  of  the  population,  the 
element  of  profit  must  be  eliminated  from  housing,  if 
they  are  to  be  fitly  housed. 

They  tried  to  do  it  first  through  philanthropy. 
They  did  far  more  in  that  way  than  we  have  ever 
done,  though  it  was  an  American,  George  Peabody, 
who  established  the  first  big  housing  fund  in  London. 
Through  it  and  nine  other  foundations,  125,000  people 
were  eventually  housed.2  Good  was  accomplished. 
Death  rates  were  lowered.  But  what  philanthropy 
could  do  was  seen  to  be  only  a  drop  in  the  bucket, 
and  the  relationship  established  was  somehow  all 
wrong. 

Then  the  credit  systems  already  described  were 
launched  and  pushed.  It  was  realized  that  com- 
munity credit  must  be  drawn  on,  but  it  was  hoped 


SHALL  WE  HAVE  MUNICIPAL  HOUSING?       75 

that  private  initiative  might  still  manage  the  enter- 
prises.   A  great  deal  has  been  done  in  this  way.    The 
co-partnership  garden  city  or  garden  suburb  societies 
represent  the  final  flower  of  the  movement. 
But  still  it  was  not  enough. 

MUNICIPAL  HOUSING  IN  ENGLAND 

Liverpool,  Manchester  and  London  began  building, 
then  many  cities.  Before  the  war,  the  London 
County  Council  had  provided  9,822  homes  for  57,942 
people.3  It  has  a  programme  under  way  now  involving 
the  completion  of  10,000  more  homes  by  March,  1921, 
and  19,000  additional  in  the  four  years  following.4 
Between  1910  and  1917,  205  different  urban  councils 
and  116  different  rural  councils  had  undertaken 
housing  projects.5 

Great  Britain  at  first  permitted  municipalities  to 
provide  housing  (Shaftesbury  Act  of  1852),  then 
encouraged  it  (Housing  of  the  Working  Classes  Act, 
1890)  and  finally  made  it  obligatory  (Housing  and 
Town  Planning  Acts,  1909, 1919). 

MUNICIPAL  HOUSING  IN  GEBMANT 

Germany  is  the  other  country  where  municipal 
housing  has  been  most  extensively  tried  out.  Mayor 
von  Wagner  started  it  at  Ulm  in  1888.  In  1910,  42 
cities  with  population  over  50,000  had  provided  hous- 
ing for  their  own  employees,  and  15  such  cities  for 
the  working  classes  in  general.  In  addition  to 
municipal  activity,  the  various  German  states,  and 


76  THE  HOUSING  FAMINE 

even  the  empire  (for  imperial  employees)  carried  on 
extensive  housing  operations. 

Municipal  housing  has,  generally  speaking,  been 
more  economically  handled  in  Germany  than  in  Eng- 
land, but  the  English  housing  standard  is  higher.6 

IN   OTHER   COUNTRIES6 

Besides  Great  Britain  and  Germany,  municipal  or 
national  housing  has  been  tried  rather  extensively 
by  Austria  and  Hungary,  and  to  a  less  extent  by 
Prance,  Italy,  Chile,  Argentina  and  Cuba.  It  has 
made  a  beginning  in  Australia,  New  Zealand, 
Sweden,  Switzerland  and  Belgium. 

IN  THE   UNITED   STATES 

"We  have  no  instance  of  municipal  housing  as  yet 
in  this  country.  There  is  no  insuperable  obstacle  if 
and  when  we  decide  we  want  it.  In  some  states  con- 
stitutional amendments  will  have  to  be  secured,  in 
others  only  an  enabling  act  will  be  necessary.  Some 
city  charters  will  have  to  be  amended.  Some  debt 
limits  will  oppose  a  difficulty,  though  bonds  issued  for 
self-supporting  utilities  are  commonly  excluded.7 

One  state,  Massachusetts,  is  carrying  on  a  small 
experiment  in  state  housing.  The  Massachusetts 
Homestead  Commission,  with  a  munificent  appropria- 
tion of  $50,000,  bought  and  laid  out  7  acres  of  land 
in  Lowell  and  built  12  houses,  which  it  is  selling  at 
cost  on  the  installment  plan  (27  years'  maximum 
time  and  5  per  cent  interest).8 


SHALL  WE  HAVE  MUNICIPAL  HOUSING?      77 

The  federal  government,  during  the  war,  through 
the  United  States  Housing  Corporation,  acting  under 
the  Department  of  Labor,  carried  on  extensive  hous- 
ing operations.9 

Municipal  housing  is  a  live  issue  in  New  York, 
Boston,  Pittsburgh,  Washington,  and  several  other 
cities. 

It  is  coming  as  surely  as  to-morrow. 

1  Housing  of  the  Unskilled  Wage  Earner,  pp.  133,  134. 

*  W.  Thompson,  Housing  Up  to  Date,  p.  143. 

8  Report  of  the  London  County  Council,  1915. 
4  Housing  Betterment,  Dec,  1910,  p.  13 

6  Forty-fifth  and  Forty-sixth  Annual  Reports  of  the  Local 
Government  Board. 

8  Housing  of  the  Unskilled  Wage  Earner,  Chap.  V. 
Bulletin  158,  U.  S.  Bureau  of  Labor  Statistics. 

7  John  Nolen,  New  Ideals  in  the  Planning  of  Cities ,  Towns  and 
Villages,  p.  108. 

8  Reports  Massachusetts  Homestead  Commission. 

•  Report  of  the  U.  S.  Housing  Corporation, 


78  THE  HOUSING  FAMINE 


TOPIC  III 

By  Frederick  L.  Ackerman 

FIRST  ARGUMENT 

1.  Another  form  of  subsidy  to  failing  financial  busi- 

ness system.  Would  stimulate  the  growth  of 
cities  and  end  in  more  congestion.  Precisely 
what  we  should  avoid.    A  dubious  proposal. 

2.  Mrs.  Wood's  housing  "at  cost"  a  misleading  and 

utterly  meaningless  expression.  Needs  looking 
into. 

3.  Again  Mr.  Murphy  and  I  agree.    His  failure  to 

recognize  sabotage  provides  me  with  good  illus- 
tration. 

It  is  fair  to  say  that  this  question  has  very  re- 
luctantly shown  its  head  in  America.  But  now  the 
question  is  openly  debated;  and  what  is  to  be  noted 
as  characteristic  of  nearly  all  the  talk  about  it  is 
that  it  is  viewed  as  a  temporary  measure — a  policy 
to  be  adopted  for  the  time  being  by  some  courageous 
state  legislature,  and  then  left  on  the  doorstep  of  the 
unsuspecting  municipality.  It  is  equally  fair  to  say 
that  the  question  is  not  ordinarily  associated  with 


SHALL  WE  HAVE  MUNICIPAL  HOUSING?      79 

communal  ownership  of  all  habitations.  But  let  us 
examine  this  matter  and  discover,  if  possible  what  it 
is  all  about. 

A  SUBSIDY  TO  WHAT? 

It  should  be  fairly  obvious  to  any  one  that  munici- 
pal ownership  and  operation  of  houses  for  wage 
workers  involves  the  building  and  renting  of  houses 
for  a  price  which  the  worker  can  afford  to  pay.  At 
the  present  juncture,  if  we  accept  as  low  a  standard 
as  the  minimum  set  up  in  our  various  tenement  house 
laws,  we  are  faced  with  the  fact  that  adequate  homes 
cannot  be  built  and  operated  for  a  rent  which  the 
lower  paid  wage  workers  can  pay.  Hence,  of  course, 
the  plan  falls  under  the  category  of  subsidy.  But  the 
question  arises — a  subsidy  to  what?  The  answer  is 
not  difficult  if  we  view  the  matter  without  prejudice. 
It  is  a  subsidy  to  the  modern  industrial  system. 
While  such  a  plan  eliminates  that  social  loss  which 
appears  in  speculative  turnover  of  property,  the 
entire  list  of  wastes  which  arise  out  of  the  production 
of  the  materials  which  go  into  the  building  of  such 
habitations  remains  to  baffle  us. 

Of  course  no  private  enterprise  could  for  long  com- 
pete; and  the  policy  once  embarked  upon  would 
ultimately  follow  the  same  course  as  was  outlined 
with  respect  to  the  use  of  public  credit.  The  muni- 
cipality would  of  necessity  be  required  to  assume  no 
less  than  the  full  obligation  of  adequately  housing 
its  entire  wage  working  population.     All  that  was 


80  THE  HOUSING  FAMINE 

said  with  respect  to  inflation  as  following  the  use 
of  credit  for  this  purpose  likewise  applies  to  the 
plan  of  municipal  ownership  and  operation.  As  a 
plan  of  action,  it  disregards  completely  the  cause 
which  has  brought  about  the  present  condition  of 
mal-adjustment.  As  a  remedy  it  is  not  therefore  to 
be  very  highly  rated.  It  may  be  set  down  as  make- 
believe  number  two. 

IT  MEANS  MORE   CONGESTION 

Important  as  is  the  matter  just  considered,  there 
is  still  a  matter  of  far  greater  importance,  which 
should  arrest  the  attention  of  all.  To  answer  the 
question  in  the  affirmative — to  say  that  urban  centers 
should  take  upon  themselves  the  work  of  building 
the  homes  for  wage  workers  is  precisely  the  same  as 
saying  that  we  are  all  in  favor  of  a  policy  which  can 
have  no  other  possible  outcome,  now  or  in  the  future, 
than  that  of  producing  a  greater  and  still  greater 
congestion  of  population  in  urban  centers. 

NOT  A  COMFORTING  THOUGHT 

The  discrepancy  which  has  arisen  between  the  pop- 
ulation of  urban  centers  and  the  supporting  agri- 
cultural population  is  sufficient  to  make  us  pause. 
We  should  pause  and  consider  whether  or  not  we  can 
afford  to  do  any  act  whatsoever  which  would  further 
increase  that  discrepancy.  There  is  no  space  here  to 
disclose  how  it  is  that  this  discrepancy  has  come 
about:  we  are  faced  with  the  fact  that  for  a  full 


SHALL  WE  HAVE  MUNICIPAL  HOUSING?      81 

century  and  a  half  there  has  been  a  constant  drift 
away  from  rural  areas  toward  the  industrial  centers. 
If  this  drift  continues  we  shall  very  soon  be  con- 
fronted with  the  condition  that  the  agricultural  pop- 
ulation may  no  longer  feed  the  urban  population. 
Central  Europe  has  long  passed  the  danger  point: 
we  are  rapidly  approaching  the  danger  point  in 
America. 

Of  course,  the  distress  which  we  witness  about 
us  animates  us  to  grasp  at  any  suggestion.  But  that 
is  no  reason  for  assuming  that  what  we  catch  hold 
of  will  support  us.  And  still  underneath  this  action 
conceived  as  good  purpose  is  the  environing  economic 
industrial  condition  which  must  have  at  the  doors  of 
factories  an  " industrial' '  population  somewhat  in 
excess  of  the  needs  of  industry. 

The  proposal  to  support  an  industrial  system 
which  is  now  running  counter  to  this  larger  social 
purpose  by  collectively  taking  over  the  building  of 
habitations  for  wage  workers  in  urban  centers,  is 
a  very  dubious  proposal, 


82  THE  HOUSING  FAMINE 


topic  in 

SECOND  ARGUMENT 

By  John  J.  Murphy 

MUNICIPAL  OWNERSHIP  AND  OPERATION  WILL  NOT  WORK 

I  have  to  protest  again  that  my  associates  are  wan- 
dering from  the  issue.  Mr.  Ackerman  must  be  taken 
as  mildly  condemning  municipal  ownership  and 
operation,  while  Mrs.  Wood  deems  it  inevitable,  but 
neither  of  them  answers  the  question,  Will  it  give  us 
quickly  an  adequate  supply  of  moderately  good 
apartments  or  houses  ?  lam  enough  of  an  opportunist 
in  facing  an  emergency  like  the  present,  to  be  willing 
to  throw  over  any  prejudices  which  I  entertain 
against  the  idea  on  principle,  as  set  forth  in  my 
opening  statement,  if  it  provides  the  needed  supply. 
I  don't  care  whether  it  is  a  prop  to  the  existing 
order,  or  whether  it  is  inevitable ;  the  point  is,  will  it 
work  now? 

NO  COMPARISON  WITH  EUROPEAN  VENTURES 

Slum  clearances  in  English  or  German  cities  are 
beside  the  mark,  and  have  no  bearing  on  present  con- 
ditions here.    More  private  capital  has  been  put  into 


SHALL  WE  HAVE  MUNICIPAL  HOUSING?      83 

construction  of  multi-family  dwellings  in  a  single 
year  in  one  American  city,  than  has  been  involved  in 
all  the  English  housing  schemes,  conducted  by 
municipalities.  With  all  due  respect  to  Mrs.  Wood's 
greater  acquaintance  with  the  subject,  I  do  not  hesi- 
tate to  assert  that  the  whole  British  housing  pro- 
gramme has  broken  down,  and  seems  doomed  to  utter 
failure. 


GOVERNMENT  INTERFERENCE   KILLS  HOUSING 
IN   ENGLAND 

The  Manchester  Guardian  announced  in  Jan- 
uary that  of  the  thousands  of  houses  needed  and 
expected  to  be  ready  at  that  time  only  300  had 
materialized,  and  that,  Manchester  was  better  off 
than  most  other  municipalities,  which  had  got  noth- 
ing at  all.  Moreover,  it  was  announced  that  21  types 
of  houses  previously  accepted  by  the  government  had 
been  turned  down  as  too  expensive.  But,  says  the 
Guardian,  "we  can  not  imagine  lower  grades  being 
capable  of  proper  use."  And  this  after  three  years 
of  preparation  and  appropriation. 

I  do  not  agree  with  Mr.  Ackerman  that  municipal 
ownership  and  operation  would  drive  private  capital 
out  of  such  ventures,  because  the  amount  which 
municipalities  could  invest  would  not  be  sufficient  tq 
take  care  of  the  demand.  The  poor  man  must  be  con- 
tent to  occupy  houses  which  were  built  for  people 
who  were  better  off,  and  subsequently  abandoned 
when  some  change  occurred  in  the  neighborhood. 


84  THE  HOUSING  FAMINE 

Regrettable  though  this  may  be,  it  has  been  the 
custom  of  American  housing  for  several  generations 
and  in  Europe  almost  universally,  so  it  is  no  new 
situation,  and  the  present  is  no  time  to  change  it. 
What  we  want  now  is  more  houses,  as  good  houses 
as  we  can  get,  but  we  must  have  houses  of  some  kind. 

NOT  A  TIME   FOR  EXPERIMENTS 

Later  on  we  will  be  willing  to  try  experiments  to 
change  the  system  so  that  the  people  who  build 
houses  may  get  a  chance  to  live  in  them,  while  they 
are  new  and  clean,  but  for  the  moment  we  must 
"pass  this  up." 

I  re-assert  that  not  only  is  municipal  interference 
undesirable  in  principle,  unworkable  in  practice,  and 
slow  of  accomplishment,  on  account  of  constitutional 
obstacles  in  the  way  of  the  use  of  the  city's  borrow- 
ing power,  but,  if  all  these  objections  were  removed, 
it  would  not  provide  as  much  housing  as  would  seri- 
ously affect  the  situation. 


SHALL  WE  HAVE  MUNICIPAL  HOUSING?      85 


TOPIC  III 
SECOND  ARGUMENT 

By  Edith  Elmer  Wood 

self-respect  and  public  utilities 

Since  it  would  be  impossible  to  suspect  former 
Commissioner  Murphy  of  intentionally  beclouding 
the  issue,  we  must  assume  he  really  thinks  that 
because  the  city  provides  "alms  houses,  hospitals, 
jails  .  .  .  for  paupers,  criminals  and  vagrants/ ' 
jworkingmen  would  suffer  a  loss  of  self-respect  in 
penting  a  house  or  an  apartment,  at  cost,  which  was 
fbuilt  by  the  city.  Waiving  the  question  as  to  whether 
a  hospital  patient  is  a  pauper,  a  criminal  or  a  va- 
grant, will  Mr.  Murphy  tell  us  whether  he  thinks  a 
loss  of  self-respect  is  involved  in  sending  one's  chil- 
dren to  the  public  school?  In  getting  books  from  the 
public  library?  In  listening  to  a  public  band  concert, 
in  using  city  water,  walking  on  city  pavements,  or 
even  in  riding  in  one  of  Mayor  Hylan's  buses?  If 
not,  why  not? 

Paupers,  criminals  and  self-respect  seem  to  have 
gone  into  the  discard  a  few  paragraphs  farther  along, 
for  Mr.  Murphy  tells  us  that  water,  light  and  trans- 
portation come  within  the  proper  field  of  "municipal 


86  THE  HOUSING  FAMINE 

ownership  and  operation."    Isn't  it  rather  begging 
the  question  just  to  assume  that  housing  does  not? 

ARE   AMERICAN   PUBLIC   OFFICIALS   ALL   GRAFTERS? 

The  back-bone  of  the  attack  lies  in  the  charges 
that  houses  built  by  a  municipality  would  necessarily 
be  poorly  built  and  extravagantly  built, — in  other 
words,  that  all  American  public  officials  are  grafters. 
Mr.  Murphy's  own  distinguished  record  as  Tenement 
House  Commissioner  sufficiently  refutes  such  cal- 
umny. 

In  a  recent  book  I  expressed  my  own  conviction  on 
this  question  as  follows:  "If  a  thing  needs  to  be 
done,  and  a  host  of  British,  German,  French,  Belgian, 
Italian,  Austrian  and  Australasian  officials  have 
proved  honest  and  efficient  enough  to  do  it  success- 
fully, no  self-respecting  American  ought  to  say,  'We 
cannot  do  it  here,.,,1° 

MUNICIPAL   DEBT  LIMITS 

In  regard  to  the  debt  limit,  Mr.  Murphy  will  find 
that  self-sustaining  utilities  like  water  and  light  are 
commonly  classified  outside  it.11  Housing  would  fall 
in  this  category. 

WHY   ONLY  TEMPORARY? 

I  do  not  know  what  gave  Mr.  Ackerman  the  idea 
that  those  who  are  advocating  municipal  housing 
are  doing  so  only  as  a  temporary  or  emergency 
measure.    I,  certainly,  am  not. 


SHALL  WE  HAVE  MUNICIPAL  HOUSING?      87 
IS  IT  A  SUBSIDY? 

When  Mr.  Ackerman  says  that  "adequate  homes 
cannot  be  built  and  operated  for  a  rent  which  the 
lower  paid  wage  worker  can  pay/'  does  he  mean  on 
the  basis  of  a  business  return?  If  so,  we  are  agreed. 
But  in  that  case,  he  has  no  reason  for  calling  the 
at-cost  service  which  has  been  proposed,  a  subsidy. 

WILL  MUNICIPAL  HOUSING   INCREASE   CONGESTION? 

Quite  surprisingly  Mr.  Ackerman  says  municipal 
housing  means  more  congestion.  The  municipal 
housing  of  my  acquaintance  either  builds  cottages, 
twelve  to  the  acre,  in  garden  suburbs,  or  tearing 
down  huddled  slums,  rebuilds  with  broad  streets, 
courts  and  play-grounds.  I  do  not  think  Mr.  Acker- 
man's  experience  has  been  different.  I  suspect  he 
only  means  chat  municipal  housing  would  make  life 
so  much  more  agreeable  that  it  would  help  to  per- 
petuate cities.  Mr.  Ackerman  apparently  thinks 
cities  can  be  abolished.    I  admit  I  do  not. 

10  Housing  of  the  Unskilled  Wage  Earner,  p.  255. 

11  John  Nolen,  New  Ideals  in  the  Planning  of  Cities,  Toums  and 
Villages,  p.  108. 


88  THE  HOUSING  FAMINE 


TOPIC  III 
SECOND  ARGUMENT 

By  Frederick  L.  Ackerman 

MRS.    WOOD   TAKES   PLUNGE 

Mr.  Murphy  concludes  that  we  should  not  resort 
to  municipal  ownership  and  operation.  Since  I 
agree  with  him,  we  may  turn  immediately  to  Mrs. 
Wood's  argument.  Mrs.  Wood  plunges  right  off  by 
saying  that  it  is  " necessary" — thereby  acknowledg- 
ing of  course  that  our  industrial  system  is  incapable 
of  performing  this  important  function.  Her  argu- 
ment, which  had  to  do  with  the  use  of  public  credit, 
is  very  largely  confined  to  the  statement  of  what  has 
been  done  in  other  countries.  She  ignores  completely 
the  causes  which  make  it  "necessary"  in  her  judg- 
ment, to  resort  to  municipal  ownership  and  operation. 

Mrs.  Wood  says:  "We  must  resort  to  municipal 
housing  unless  we  dam  the  flood  of  modern  tendency 
...  so  as  to  halt  the  growth  of  cities."  It  is  evident 
that  she  does  not  think  that  we  can  dam  this  flood 
of  modern  tendency.  She  says  in  effect — let  it  run 
on — help  it  along  by  resorting  to  municipal  housing. 
Now  it  is  precisely  this  condition — the  drift  of  people 


SHALL  WE  HAVE  MUNICIPAL  HOUSING?      89 

into  urban  centers — which  constitutes  our  problem. 
I  cannot  see  that  she  has  made  a  very  good  case  for 
municipal  housing  on  the  score  of  "necessity." 

AT  COST — WHAT  DOES  IT  MEAN? 

Speaking  of  "a  considerable  element,  lacking  the 
initiative  and  resources  to  arrive  at  home  owner- 
ship*'  she  says  "city  housing,  at  cost,  is  their  only 
salvation. ' y  I  will  not  here  debate  the  question  as  to 
whether  or  not  municipal  housing  is  a  certain  road 
to  the  salvation  of  civilization.  I  am  inclined  to 
think  that  it  is  rather  a  roundabout  and  dubious  way 
to  such  an  end.  But  the  phrase  "at  cost"  must  be 
looked  into.  What  does  it  mean?  Obviously  to  Mrs. 
Wood  it  means  no  speculative  profit  to  a  builder — 
no  profit  on  investment  to  a  landlord.  Not  a  bad 
idea!  But  let  us  look  again.  How  many  profits 
have  been  taken  in  the  chain  of  land  transfers?  And 
what  about  the  wastes,  obstructions  and  cancella- 
tions which  have  been  making  a  pyramid  of  "costs" 
in  the  fabrication,  in  the  sale  and  in  the  delivery  of 
the  materials? 

NOW  VIEW  THE   PYRAMID 

The  price  of  every  commodity  and  service  so  called 
entering  into  such  a  municipally  owned  building 
would  carry  its  proportion  of  interest  upon  a  vast 
sum  representing  capitalized  prospective  income  and 
"water"  in  endless  enterprises;  its  share  in  the 
"selling  costs"  of  endless  things  and  commodities— 


90  THE  HOUSING  FAMINE 

most  of  which  may  be  very  remotely  related  to  the 
materials  used ;  its  share  in  idle  plants  and  equipment 
consequent  upon  the  condition  that  prices  must  be 
kept  up  by  keeping  production  down ;  its  share  in  the 
cost  of  strikes,  lockouts  and  the  restrictions  upon  the 
production  of  labor ;  its  share  in  the  losses  due  to  the 
unorganized  condition  of  the  entire  building  indus- 
try, which  uses  the  labor  power  of  some  trades  not  to 
exceed  half  of  the  time — all  of  these  losses  and  many 
more  appear  in  the  price  of  these  municipal  houses: 
and  it  is  said  that  they  are  built  "at  cost." 

SUBJECT  OF   PROFITS    COMES   ON  TO   STAGE  AGAIN 

A  little  thought  should  make  it  plain  that  not  very 
much  is  to  be  gained  by  way  of  a  reduction  of  selling 
price  until  we  develop  an  industrial  system  which 
approaches  its  task  directly. 

Again  Mrs.  Wood  notes  the  need  of  the  elimination 
of  profit ;  she  says  in  reference  to  the  British  effort, 
"they  saw  that  for  a  considerable  segment  of  the 
population  the  element  of  profit  must  be  eliminated 
from  housing  if  they  are  to  be  fitly  housed."  Again 
I  ask  the  same  question  that  I  asked  in  the  previous 
statement :  if  it  is  important  to  eliminate  profit,  why 
stop  at  the  elimination  of  merely  one  profit?  Why 
not  attempt  to  eliminate  the  real  waste  in  the  build- 
ing industry  by  organizing  it? 


SHALL  WE  HAVE  MUNICIPAL  HOUSING?      91 


TOPIC  III 
THIRD  ARGUMENT 

By  John  J.  Murphy 

GOVERNMENT   COST  GREATER  THAN  PRIVATE   COST 
PLUS  PROFIT 

Mrs.  Wood's  contention  that  municipally  provided 
houses  would  be  supplied  at  cost,  and  that  therefore 
no  loss  of  self-respect  would  be  involved  in  using 
them,  breaks  down  before  the  fact  that  cost  of  con- 
struction by  Government  would  always  be  so  much 
higher  than  by  private  capital  that  rents  for  such 
houses,  if  fixed  on  a  cost  basis,  would  be  higher  than 
in  privately  constructed  houses,  and  hence  no  prac- 
tical benefit  would  ensue  to  the  tenant. 

WE  GET  NOTHING  FROM  GOVERNMENT  GRATIS 

Mrs.  Wood  seems  to  labor  under  the  delusion  that 
we  have  free  schools,  libraries,  concerts  and  city 
water.  I  am  sure  on  second  thought  she  will  recede 
from  this  position.  We  pay  for  them  all  in  taxes. 
They  are  only  nominally  free. 


92  THE  HOUSING  FAMINE 


HIGHER   COST   OF   GOVERNMENT   CONSTRUCTION   INHER- 
ENT IN  SYSTEM,   NOT  MAINLY   DUE  TO   GRAFT 

I  have  not  contended  that  municipal  ownership 
and  operation  has  not  its  proper  place,  but  housing 
is  not  its  function.  Those  who  use  services  should 
pay  for  them.  Neither  have  I  contended  that  all 
officials  were  grafters;  that  is  Mrs.  Wood's  inference. 
The  added  cost  of  all  Government  work  is  due  to 
formalities  and  requirements  over  which  the  officials 
have  no  control,  and  which  we  have  found  no  means 
of  dispensing  with.  I  do  not  admit  any  superiority 
of  foreign  officials  over  our  own.  If  the  inside  facts 
of  foreign  administration  were  subjected  to  proper 
accountancy  examination,  the  conditions  that  I  fore- 
see here  would  be  found  abundantly  there. 

HOUSING  NOT  A  PROPER  GOVERNMENT  FUNCTION 

I  am  not  taking  ground  against  municipal  owner- 
ship and  operation,  but  only  against  attempting  to 
extend  it  into  a  field  where  it  cannot  function  prop- 
erly. England  has  had  vast  experience  and  much 
success  in  municipal  ownership  and  operation,  but 
its  housing  programme  has  resulted  in  a  colossal 
fiasco.  Why  should  we  repeat  it,  and  lose  not  only 
money,  but  what  is  more  precious,  time,  in  attempt- 
ing a  proved  impossibility? 


SHALL  WE  HAVE  MUNICIPAL  HOUSING?      93 


ERROR  AS  TO   EXCLUSION  OF  WATER  AND 
LIGHT  BONDS   FROM   CITY  DEBT 

I  believe  that  Mrs.  Wood  is  mistaken  as  to  the 
exemption  of  water  and  light  bonds  from  inclusion 
in  city  debts.  In  some  city  charters  there  is  the  pro- 
vision that  bonds  for  water  supply  may  issue  even 
though  the  debt  limit  is  exhausted,  but  no  more 
bonds  for  any  other  public  purpose  can  be  issued 
until  the  city's  borrowing  power  catches  up,  which 
is,  of  course,  a  different  thing  entirely  from  Mrs. 
Wood's  supposition. 


94  THE  HOUSING  FAMINE 


TOPIC  III 
THIRD  ARGUMENT 

By  Edith  Elmer  Wood 

mr.  murphy  and  the  british  housing  programme 

Mr.  Murphy  says  he  is  enough  of  an  opportunist 
to  favor  municipal  housing  if  it  will  work, — if  it  will 
provide  us  quickly  with  needed  houses.  He  bases  his 
contention  that  it  will  not  work  on  his  assertion  that 
"The  whole  British  housing  programme  has  broken 
down  and  seems  doomed  to  utter  failure/'  quotes  a 
"kick"  from  the  Manchester  Guardian  that  only  300 
houses  of  the  thousands  promised  had  so  far  material- 
ized (date  of  January,  1920),  and  exclaims  "And 
this  after  three  years  of  preparation  and  appropria- 
tion.' ' 

After  Mr.  Murphy's  handsome  acknowledgment  of 
my  "greater  acquaintance  with  the  subject,"  I  really 
hate  to  point  out  that  the  present  British  Housing 
Act  only  became  law  on  July  31,  1919,  the  Acqui- 
sition of  Land  Act  was  passed  the  following  month, 
and  amendments  to  the  Housing  Act,  found  to  be 
necessary,  were  not  secured  till  late  in  December. 
This  doesn't  leave  much  of  Mr.  Murphy's  three  years. 


SHALL  WE  HAVE  MUNICIPAL  HOUSING?      9S 

And  to  have  actually  finished  even  300  houses  out  of 
the  10,000  or  more  planned  for  Manchester,  in  the 
midst  of  starting  nation-wide  projects  for  several 
hundred  thousand  homes  seems  to  me  rather  quick 
work,  in  spite  of  the  inevitable  fault-finding  of  an 
opposition  newspaper. 

WHY  CROSS  BRIDGES  TILL  WE  GET  TO  THEM? 

Mr.  Ackerman  points  out  again,  quite  truly,  that  my 
proposals  eliminate  only  the  final  profit.  He  asks 
"Why  stop  at  the  elimination  of  one  profit?"  To 
which  I  reply  "Why  not  begin  with  that  ?  If  it  proves 
enough,  we  can  stop  there.    If  it  doesn't,  we  can  go 


96  THE  HOUSING  FAMINE 


TOPIC  III 

THIRD  ARGUMENT 
By  Frederick  L.  Ackerman 

MUNICIPAL  HOUSING  "AT  COST  "  DOES  NOT  MEAN  VERY 
MUCH.  WHY  STIMULATE  THE  GROWTH  OP  CITIES  AL- 
READY TOO   LARGE? 

I  assumed  from  the  opening  paragraph  of  Mrs. 
Wood's  first  argument  that  she  took  the  position  that 
if  we  could  i  '  dam  the  flow  of  modern  tendency  .  .  . 
so  as  to  halt  the  growth  of  cities/ ■  it  would  not  be 
necessary  to  resort  to  municipal  housing.  Assuming 
that  she  would  later  develop  a  programme  for  check- 
ing the  flow  of  population  into  urban  centers,  I 
(wrongly)  took  for  granted  that  municipal  housing 
was  to  be  viewed  as  a  temporary  measure. 

A  LOOSE   PHRASE 

Again,  I  repeat  that  municipal  housing  is  to  be 
viewed  as  a  subvention  to  our  wasteful  modern  in- 
dustrial system,  since  by  embarking  upon  such  a  pro- 
gramme we  engage  to  absorb  the  entire  list  of  wastes 
and  losses  to  which  I  have  repeatedly  referred.    All 


SHALL  WE  HAVE  MUNICIPAL  HOUSING        97 

of  these  sundry  wastes  and  losses  appear,  of  course, 
in  the  final  price  of  the  municipal  house.  Nowhere 
in  my  argument  have  I  used  the  phrase  "at  cost" 
in  the  loose,  meaningless  way  that  Mrs.  Wood  re- 
peatedly uses  it.  Municipal  housing,  carried  out  in 
the  manner  advocated  by  Mrs.  Wood,  is  not  to  be 
looked  upon  as  housing  "at  cost." 

ATHY  STIMULATE   GROWTH   OF  CITIES? 

As  to  congestion:  I  stated  in  my  argument  and  I 
repeat  that  a  policy  of  municipal  housing,  once  em- 
barked upon,  would  of  a  necessity  run  in  the  direc- 
tion of  stimulating  the  growth  of  urban  centers. 
Nowhere  in  my  argument  have  I  dealt  with  the 
problem  of  slum  clearance  and  re-housing.  In  her 
rebuttal,  Mrs.  Wood  completely  avoids  my  major 
argument  relative  to  the  importance  of  not  stimu- 
lating the  growth  of  urban  centers. 

I  have  not  advocated  anywhere  in  my  argument 
the  abolition  of  cities.  I  have  argued  that  any  de- 
liberate, collective  act  which  aimed  directly  at  stimu- 
lating the  expansion  of  cities  was  to  be  set  down  with- 
out further  argument  as  an  act  running  counter  to  our 
central  purpose.  Mrs.  Wood  has  not  met  my  argu- 
ments in  this  respect. 


TOPIC  IV 

SHALL   WE   EXEMPT   MORTGAGES   AND 
IMPROVEMENTS  FROM  TAXATION? 


TOPIC  IV 
FIRST  ARGUMENT 
By  John  J.  Murphy 

1.  I  favor  exemption  from  taxation  of  incomes  de- 

rived from  mortgages,  and  all  new  buildings 
erected  within  three  years  for  a  limited  period. 
Remove  the  obstacles,  and  buildings  will  rise. 

2.  Mrs.  Wood  accepts  this  proposition  with  some 

qualifications.  For  this  small  favor  I  am  grate- 
ful. 

3.  Mr.  Ackerman  thinks  that  an  exemption  is  the 

same  as  a  subsidy.  If  you  break  a  man's  leg 
and  give  him  a  crutch  it  is  a  subsidy.  Would 
it  not  have  been  better  not  to  break  it  at  all? 
That  would  be  an  exemption. 

THE   MORTGAGE  TAX  DELUSION 

The  answer  to  the  above  question  must  be  divided 
into  two  parts : 

(1)  The  effect  of  the  Exemption  of  Income  de- 

rived from  Mortgages  on  New  Buildings. 

(2)  The  Effect  of  the  Exemption  of  New  Build- 

ings. 

101 


102  THE  HOUSING  FAMINE 

A  mortgage  is  an  instrument  by  which,  in  return 
for  a  loan  the  owner  of  property  pledges  his  property 
for  the  return  of  the  loan  with  such  interest  as  may 
be  agreed  upon.  It  has  long  been  a  popular  delusion 
that  by  taxing  mortgages,  we  were  getting  money 
out  of  the  unpopular  class  known  as  money-lenders. 
As  a  matter  of  fact,  they  always  "passed  the  buck"  to 
the  borrower. 

THE   BORROWER  ALWAYS  PAYS 

Of  course,  we  tried  to  stop  this  by  putting  a  limit 
on  the  interest  which  might  be  charged,  but  again 
the  law  was  circumvented,  for  the  borrower,  being 
obliged  to  have  the  money,  paid  a  " bonus' y  to  the 
lender.  Nominally  loans  are  made  to  individuals 
to-day  at  6%,  because  that  is  the  maximum  rate  that 
the  law  allows  in  New  York,  but  borrowers  are 
paying  8%  or  more  actually — another  case  where 
attempted  Government  interference,  however  hu- 
mane and  well-meant,  is  nullified  when  it  encounters 
economic  law.  Capital  has  never  been  so  plentiful 
that  it  had  to  beg  for  employment,  and  until  it 
becomes  so,  taxes  on  mortgages  will  always  be  paid 
by  the  borrower. 

WOULD   MAKE   BUILDING  LOANS   CHEAPER 

Hence,  exemption  of  income  derived  from  mort- 
gages on  new  buildings  would  make  loans  for  build- 
ing cheaper  and  easier  to  get.  In  housing  this 
is  very  important.  Practically  everybody  who 
builds  has  to  get  a  mortgage  ta  help  "  carry  the 


EXEMPTING  MORTGAGES  AND  IMPROVEMENTS    103 

property."  The  number  of  people  who  own  their 
homes  * i  free  and  clear ' '  is  small.  If  mortgage  money 
can  be  had,  cheaper  building  will  be  easier.  And 
the  difference  will  be  more  than  the  actual  exemp- 
tion capitalized,  for  investors  are  a  little  more  will- 
ing to  invest  in  tax-free  securities  than  in  others. 
Therefore,  there  can  be  little  doubt  that  such  exemp- 
tion would  be  helpful  as  far  as  it  goes.  Those  who 
think  that  the  benefit  would  go  entirely  to  the  lender 
are  mistaken. 

EXEMPT  NEW   DWELLINGS   FROM  TAX 

The  effect  of  exempting  improvements  in  general 
from  taxation  is  not  a  practical  question  at  the 
moment,  though  it  would  have  beneficial  results; 
what  is  a  practical  question  is  the  exemption  from 
taxation  of  new  buildings  designed  for  dwelling 
purposes.  It  can  hardly  be  gainsaid  that  the  real 
estate  tax  imposed  on  buildings  is  one  of  the  most 
serious  obstacles  now  in  the  way  of  new  construc- 
tion. A  new  building  to  house  20  families  will  cost 
at  present  prices  $120,000.00,  exclusive  of  the  value 
of  the  lot. 

PRESENT  SYSTEM  EXACTS  25  PER  CENT 
OF   GROSS  EARNINGS 

The  tax  on  such  a  building  in  New  York,  exclusive 
of  the  tax  on  the  lot,  would  be  about  $3000.00,  nearly 
25  per  cent  of  the  gross  annual  revenue  from  the 
building ;  if  this  sum  were  remitted  for  ten  to  twelve 
years,  it  would  offer  a  handsome  inducement  to 


104  THE  HOUSING  FAMINE 

builders  to  resume  building,  and  would  guarantee 
them  against  loss  due  to  falling  prices  of  labor  and 
materials.  For  a  while  the  result  of  such  a  policy 
would  inure  to  the  benefit  of  the  owner,  but  to  the 
same  extent  it  would  encourage  others  to  make 
similar  investments,  and  competition  would  soon 
bring  down  rents. 

WOULD  PROVIDE  MORE  HOUSES 

It  would  get  us  more  houses,  which  is  the  main 
aim  of  our  inquiry,  and  it  is  the  only  policy  which 
can  be  made  operative  at  once,  without  delay,  and 
without  raising  questions  which  the  Courts  would 
ultimately  have  to  settle.  It  would  to  all  intents 
and  purposes  be  a  subsidy,  but  it  would  be  a  subsidy 
which  could  not  be  misapplied  or  squandered  or  used 
for  political  or  profiteering  purposes. 

STUPID  TAXATION  THE   MAIN   OBSTACLE 

We  hear  much  contemptuous  reference  to  the  law 
of  supply  and  demand,  in  these  days — but  it  operates 
just  the  same.  Of  course,  it  can  be  interfered  with 
by  Government  or  monopoly.  Government  by  its 
stupidity  in  taxing  the  things  that  people  want,  and 
that  poor  people,  especially,  want,  has  brought  about 
a  state  of  things  where  poor  people  have  never  had 
decent  and  adequate  housing.  All  that  is  necessary 
is  that  Government  should  stop  obstructing;  if  this 
is  done,  and  there  is  still  a  housing  shortage,  we  can 
then  consider  what  further  to  do,  but  until  this  is 
done,  there  is  no  use  in  trying  artificial  methods  to 
overcome  the  scarcity. 


EXEMPTING  MORTGAGES  AND  IMPROVEMENTS    105 


TOPIC    IV 
FIRST  ARGUMENT 

By  Edith  Elmer  Wood 

1.  Tax  exemptions  can  be  made  mildly  helpful  in 

stimulating  building.    Unless  supplemented  by 
other  measures  they  are  hopelessly  inadequate. 

2.  The  form  especially  advocated  by  Mr.  Murphy  is 

highly  objectionable.    It  subsidizes  the  builder 
and  landlord  at  the  expense  of  the  taxpayer. 

3.  Mr.  Ackerman  postpones  tax  reform  till  the  mil- 

lennium. 

TAX  EXEMPTION  A   SUBSIDY 

The  exemption  of  mortgages  and  the  exemption 
of  improvements  are  two  distinct  matters  that  must 
not  be  confused.  There  is  also  the  preferential 
exemption,  much  used  abroad,  but  hardly  known 
here. 

In  general,  tax  exemption  is  disguised  subsidy, 
either  from  the  state,  which  foregoes  a  portion  of 
its  income,  or  to  one  group  of  tax  payers  at  the 
expense  of  another  group.  It  may  sometimes  be 
desirable,  but  at  least  let  us  have  clear  thinking  and 
act  with  our  eyes  open, 


106  THE  HOUSING  FAMINE 

EXEMPTION   OF   IMPROVEMENTS 

The  partial  or  complete  exemption  of  improve- 
ments (i.e.  buildings)  from  taxation  has  been  much 
talked  of,  and  to  some  extent  practiced  in  the  United 
States  and  Canada.  The  effect  appears  to  be  good, 
but  no  millennium  has  resulted.  The  total  amount 
of  taxes  collected  remains  the  same,  but  laying  them 
exclusively  on  land  encourages  building  by  making 
it  expensive  to  hold  land  idle.  The  nearer  the  tax  on 
land  comes  to  absorbing  its  total  rent  value  (the  ideal 
of  the  single  taxers)  the  more  forcible  will  be  the 
encouragement.  Most  economists  agree  that  it  is  in 
the  public  interest  to  accord  improvements  some 
degree,  at  least,  of  exemption.  The  proposal  was 
turned  down  in  the  report  of  the  Committee  on 
Taxation  of  the  City  of  New  York  in  1916,  but  a 
strong  minority  favored  it. 

There  is  a  danger  in  exempting  improvements, 
which  is  pointed  out  by  Carol  Aronovici  in  his 
Housing  and  the  Housing  Problem.1  Unless  a  city 
is  protected  by  zoning  provisions  covering  height  of 
buildings  and  percentage  of  area  that  may  be  built 
on,  the  effect  of  laying  the  whole  tax  on  land  will 
be  to  encourage  congestion.  That  is,  in  a  predom- 
inantly three-story  district,  for  instance,  with  land 
taxed  on  that  basis,  there  is  a  strong  temptation 
to  build  four,  five  or  six  stories,  and  to  cover  as 
much  as  possible  of  the  lot  since  the  tax  will  remain 
the  same.  Where  zoning  is  already  in  force,  as  in 
New  York,  this  objection  disappears. 


EXEMPTING  MORTGAGES  AND  IMPROVEMENTS    107 

The  exemption  of  improvements,  if  safe-guarded 
by  zoning  provisions,  would  exert  a  helpful  influence 
in  reducing  the  present  abnormal  scarcity  of  high- 
priced  dwellings.  Its  effect  on  solving  the  problem 
of  the  workingman  would  be  slight,  since  it  would 
not  cheapen  house  construction.  His  only  chance 
to  benefit  would  be  indirectly,  through  the  removal 
of  some  of  the  better-to-do  to  other  quarters  and 
a  consequent  lessening  of  competition  for  what 
remained. 

EXEMPTION   OF  MORTGAGES 

The  much  discussed  exemption  of  mortgages  from 
state  and  federal  income  tax,  either  complete  or  with 
a  $30,000  or  $40,000  limit,  is  clearly  a  subsidy,  as  it 
is  a  proposal  to  reduce  state  and  national  income 
by  the  amount  of  the  exemption. 

If  it  is  to  be  done,  what  form  shall  it  take  ?  Shall 
all  mortgages  be  exempt?  Or  only  mortgages  on 
dwellings?  Or  only  mortgages  on  a  certain  class 
of  dwellings? 

If  all  mortgages  are  exempt,  the  house  famine 
will  profit  little,  since  there  is  more  money  to  be 
made  in  other  forms  of  building.  If  mortgages  on 
all  dwellings  are  exempt,  workingmen  will  profit 
little,  except  indirectly,  as  already  described.  If  the 
exemption  were  for  mortgages  on  dwellings  which 
were  not  to  rent  for  more  than  $30  a  month,  say, 
in  the  large  cities,  or  $20  in  small  towns,  there  might 
be  created  a  fringe  of  profit  that  would  induce  a 
trifle  of  building.    The  matter  is  problematical. 


108  THE  HOUSING  FAMINE 

PREFERENTIAL  EXEMPTION 

The  European  method  referred  to  is  preferential 
exemption,  with  the  declared  object  of  encouraging 
the  building  of  workingmen's  houses.  It  is  always 
an  indirect  subsidy,  although  not  always  a  permanent 
one. 

In  Great  Britain,  in  1913,  5,607,275  dwelling 
houses  were  exempt  from  inhabited  house  duty. 

On  the  continent,  much  fewer  exemptions  are 
made,  but  the  exemption  is  dependent  on  standard, 
and  is,  therefore,  particularly  beneficial.  Thus,  in 
Belgium,  tax  exemptions  amounting  to  about  50  per 
cent,  are  granted  workingmen's  houses  which  obtain 
the  certificate  of  their  local  housing  board  that  they 
comply  with  the  standards  prescribed. 

Total  tax  exemption  for  dwellings  of  approved 
type  and  below  a  certain  rental  is  common  in  Ger- 
many for  a  number  of  years,  usually  12.  France 
grants  partial  tax  exemption  under  rather  strict 
conditions  of  standard  and  rental.  In  Italy  there 
is  a  total  exemption  of  approved  houses  for  10  years. 
Austria,  Spain,  Rumania,  and  some  of  the  Swiss  Can- 
tons grant  tax  exemptions.  Brazil  gives  a  15-year 
exemption  to  companies  building  houses  for  working- 
men. 

It  all  helps. 

1  Pp.  68,  69. 

2  Housing  of  the  Unskilled  Wage  Earner,  Chap.  V. 


EXEMPTING  MORTGAGES  AND  IMPROVEMENTS   109 


TOPIC    IV 
FIRST  ARGUMENT 

By  Frederick  L.  Ackerman 

1.  Tax  exemption  of  income  from  mortgages  a  very 

dubious  proposal.  To  be  viewed  as  a  subsidy 
to  financial  business  system.  As  a  subsidy  not 
sufficient  to  stimulate  building.  Single  tax  pro- 
posal upset  by  system  of  price  competition. 
Proposal  dodges  the  real  issue. 

2.  Mrs.  Wood  agrees  that  it  is  a  subsidy:  says  it 

would  help.    Help  what?    I  ask. 

3.  Mr.  Murphy  completely  ignores  the  economic  con- 

ditions which  lead  him  to  advocate  the  use  of 
subventions. 

Under  this  question  it  seems  pertinent  to  first  dis- 
cuss that  measure  upon  which  so  many  rest  their 
hopes,  viz.,  the  tax  exemption  of  income  from  mort- 
gages. This  measure  looking  toward  the  reduction 
of  the  income  tax  naturally  comes  in  for  almost 
universal  approval;  and  of  course  it  is  asserted  by 
all  its  advocates  that  such  action  would  immediately 
start  the  flow  of  loan  credit  in  the  direction  of  build- 
ing homes  for  the  wage  worker. 


110  THE  HOUSING  FAMINE 

A  DUBIOUS   PROPOSAL 

But  in  view  of  the  condition  that  the  great  field 
of  industrial  enterprise  is  now  and  has  been  return- 
ing by  way  of  dividends,  stock  bonuses,  etc.,  after 
all  taxes  are  deducted,  a  far  greater  return  upon 
capital  invested  than  is  ordinarily  to  be  expected 
from  homes  built  for  the  wage  worker — in  view  of 
this  condition  of  fact,  it  is  not  likely  that  such  a 
move  would  amount  to  more  than  a  gesture  of  good 
intention.  I  would  not  place  a  very  large  wager  on 
such  a  dubious  proposal  in  view  of  the  present  cost 
of  building  and  the  condition  that  rents  in  general 
are  now  far  below  the  return  which  must  be  had 
from  new  buildings  in  order  to  make  them  show  a 
bare  interest  return. 

NOT  EVEN  A  SUFFICIENT  SUBSIDY 

But  speculation  concerning  the  outcome  of  this 
rather  dubious  suggestion  is  somewhat  beside  the 
point  when  the  matter  is  viewed  from  the  angle  of 
the  significance  attached  to  such  an  act.  With  in- 
come taxes  as  now  fixed,  to  exempt  the  income  from 
mortgages  of  a  certain  class  is  to  subsidize  the  sys- 
tem of  production  as  now  carried  on.  It  is  a  prop 
to  that  system  of  investment  for  profit  which  has 
failed  to  produce  homes  while  it  produces  factories 
for  the  production  of  all  sorts  of  less  vital  things. 
It  gives  no  aid  to  the  processes  (technological)  of 
production;  it  does  nothing  to  free  those  processes 


EXEMPTING  MORTGAGES  AND  IMPROVEMENTS   111 

from  the  hampering  conditions  of  price  competition ; 
it  eliminates  none  of  the  waste.  The  whole  list  of 
lost  motions  and  useless  services  performed  in  the  pro- 
duction, sale  and  distribution  of  commodities  which 
go  into  the  building  of  homes — all  these  are  left  to 
be  absorbed  by  the  last  of  the  line — the  ultimate 
consumer.  But  there  is  one  Jfching  to  be  said  in 
favor  of  the  plan  to  exempt  the  income  from  building 
mortgages,  it  would  be  likely  to  disclose  the  futility 
of  such  an  act  because  of  the  reasons  above  stated, 
thus  bringing  us  one  step  nearer  to  gaining  an 
insight  into  the  cause  which  is  at  the  root  of  the 
condition  of  house  shortage. 

The  question  implies  the  application  of  the  single 
tax,  although  it  is  not  at  all  clear  that  the  question 
is  to  be  construed  in  this  manner.  Under  the  present 
economic  system  of  taxation,  the  act  of  exempting 
mortgages  and  improvements  from  taxation  would 
not  stimulate  building  even  in  theory.  For  what 
stimulates  building  under  the  present  economic  sys- 
tem is  the  reasonable  assurance  of  a  favorable  rela- 
tion between  cost  of  building  and  expected  income. 
It  should  be  obvious  to  any  one  that  under  present 
conditions  no  such  results  may  be  expected.  The 
suggestion  falls  by  the  same  argument  as  was  used 
in  connection  with  the  exemption  of  the  income  of 
mortgages  from  taxation. 

It  is  important  to  here  note  that  the  theory  of 
the  single  tax — taxing  land  in  order  to  bring  it 
into  use — fails  to  take  into  account  that  under  our 
economic  system  production  is  considered  in  terms 


112  THE  HOUSING  FAMINE 

of  profits  and  not  in  terms  of  goods.  We  might 
tax  land  with  a  view  of  producing  beans  or  tene- 
ments or  some  other  commodity,  but  paying  the  taxes 
would  depend  upon  whether  there  was  a  favorable 
market,  that  is  to  say,  a  demand  for  these  particular 
commodities  at  a  good  price.  The  system  of  com- 
petition in  terms  of  price  again  obstructs. 

The  statements  denying  the  advantages  to  be 
gained  from  exempting  mortgages  and  improvements 
from  taxation  are  based  upon  the  conditions  that 
such  an  act,  under  the  working  of  our  financial 
system,  is  to  be  viewed  as  a  subvention  to  the  finan- 
cial business  system  which  operates  against  the  build- 
ing of  homes.  The  wastes  and  curtailments  are 
allowed  to  remain. 

What  scheme  of  taxation  should  be  employed  in 
conjunction  with  a  system  of  production  which  aimed 
at  the  production  of  goods  instead  of  profits,  is 
beside  the  point  until  we  are  provided  with  such  a 
system. 


EXEMPTING  MORTGAGES  AND  IMPROVEMENTS   113 


TOPIC    IV 
SECOND   ARGUMENT 

By  John  J.  Murphy 

HALF-HEARTED  APPROVAL 

The  proposition  to  exempt  mortgages  and  improve- 
ments on  real  estate  from  taxation  receives  favorable 
consideration  at  the  hands  of  my  opponents.  The 
worst  that  Mr.  Ackerman  says  of  it  is  that  it  is 
dubious;  while  Mrs.  Wood  finds  something  to  com- 
mend in  it.  But  I  am  not  content  with  these  half- 
hearted concessions.  I  entirely  concede  that  in 
amount,  the  money  which  would  be  saved  to  in- 
vestors by  the  exemption  from  income  tax  of  money 
invested  in  mortgages,  might  be  small,  but  in  finan- 
cial affairs  even  small  differentials  count  consider- 
ably in  the  final  determination  of  where  money  will 
be  placed.  And  it  is  intolerable,  at  a  time  when 
public  need  is  so  great,  that  the  government  should 
act  in  any  way  to  repress  necessary  investment  in 
housing. 

EXEMPTION  OF  BUILDINGS  FROM  TAXATION 

It  is,  however,  to  the  other  proposal,  the  exemp- 
tion of  buildings,  especially  dwellings,  from  taxation 


114  THE  HOUSING  FAMINE 

that  I  pin  my  strongest  hopes  of  speedy  relief. 
Capital,  by  which  I  mean  wealth  ready  for  invest- 
ment in  productive  enterprises,  was  never  more 
abundant  than  now.  It  is  seeking  and  finding  oppor- 
tunities in  all  directions.  It  goes  where  there  is  the 
best  security  and  the  largest  returns. 

DIVERTED  TO   PRODUCTION   OF  LUXURIES 

It  has  been  diverted  into  the  production  of  luxuries 
and  non-essentials  by  the  large  profits  which  they 
pay,  and  yet  nearly  a  billion  went  into  contracts 
for  dwelling  houses  in  1919,  the  biggest  year  by 
nearly  100%  ever  known  in  the  building  business 
in  the  United  States.  Clearly  this  sum,  big  as  it  is, 
is  not  enough  to  make  up  for  the  two  lost  years  in 
building  construction,  1918  and  1917.  It  must  be 
stimulated  further  and  the  way  to  do  it  is  to  take 
off  the  embargo  now  put  on  building  by  the  tax 
on  improvements.  The  idea  is  not  a  new  one.  Syd- 
ney, New  South  Wales,  is  perhaps  the  most  conspicu- 
ous example  of  a  large  city  in  the  American  sense 
of  the  word  large,  which  has  decided  that  it  is  a 
suicidal  policy  to  tax  buildings  while  the  people  are 
in  serious  need  of  them. 

NOT  THE  SINGLE  TAX 

After  bringing  in  the  same  objection  to  this  pro- 
posal that  he  does  to  the  others,  namely  that  it  props 
the  system  of  investment  for  profit  which  he  would 
destroy,  and  which  I  would  retain,  until  some  other 


EXEMPTING  MORTGAGES  AND  IMPROVEMENTS    115 

equally  potent  human  motive  can  be  set  up  in  its 
place,  Mr.  Ackerman  says  that  the  proposal  implies 
the  application  of  the  single  tax.  Just  where  he 
finds  a  warrant  for  this  idea  I  am  unable  to  say. 
It  is  true  that  if  improvements  were  exempt  there 
would  be  one  tax  less  and  to  that  extent,  we  would 
have  approached  that  much  nearer  to  the  single 
taxer's  ideal,  but  it  would  not  be  very  far  along 
the  road.  I  am  unable  to  follow  some  of  Mr.  Acker- 
man 's  argument  on  the  subject,  due  perhaps  to  an 
unfortunate  lack  of  training  in  metaphysics,  but  I 
believe  his  meaning  to  be  that  taking  taxes  off  new 
buildings  would  not  add  to  the  profitableness  of 
building  enterprises.  I  think  the  illustration  in  my 
first  statement  on  this  subject  covers  that  adequately, 
and  that  I  may  leave  to  the  reader  whether  he  does 
not  think  that  an  increase  of  20%  in  the  return  from 
an  investment  would  be  a  great  inducement  to  go 
into  such  an  enterprise. 


116  THE  HOUSING  FAMINE 


TOPIC   IV 
SECOND   ARGUMENT 

By  Edith  Elmer  Wood 

exemption  of  mortgages 

Mr.  Murphy  agrees  with  me  in  drawing  a  clear 
distinction  between  exemption  of  mortgages  from 
income  tax  and  exemption  of  improvements.  We 
seem  also  to  agree  that  the  former  exemption  "  would 
be  helpful  as  far  as  it  goes." 

EXEMPTION   OF  IMPROVEMENTS 

Rather  mysteriously  Mr.  Murphy  asserts,  coming 
to  the  second  question,  that  the  "exemption  of  im- 
provements in  general  is  not  a  practical  question 
at  the  moment,  though  it  would  have  beneficial  re- 
sults.' 9  Please,  if  it  would  have  beneficial  results, 
why  isn't  it  practical? 

EXEMPTION  OF  ALL  NEW  DWELLINGS 

What  Mr.  Murphy  does  favor  is  truly  extra- 
ordinary— a  tax  exemption  for  10  or  12  years  on  all 
new  dwellings — not  dwellings  for  wage  earners,  not 
dwellings  whose  rentals  are  subject  to  public  control, 


EXEMPTING  MORTGAGES  AND  IMPROVEMENTS    117 

or  whose  profits  are  limited  in  any  way — just  plain, 
straight,  unconditional  subsidy  (as  Mr.  Murphy 
admits)  to  the  speculative  builder  and  landlord !  It 
would  be  shockingly  socialistic  for  the  city  to  build 
houses  to  rent  to  workingmen  at  cost,  but  it  is  all 
right  for  it  to  hand  out  a  fat  slice  of  the  people's 
money  to  a  group  of  business  men,  who,  not  so  long 
ago  in  New  York,  voted  down  a  proposal  to  limit 
themselves  to  a  profit  of  20  per  cent  net!3  What 
has  become  of  laissez-faire  and  the  sacred  principle 
of  supply  and  demand? 

WHAT  IS   GOVERNMENT   STUPIDLY   TAXING 
THAT  POOR  PEOPLE   WANT? 

Finally  Mr.  Murphy  leaves  us  to  ponder  this 
cryptic  statement:  "Government  by  its  stupidity  in 
taxing  the  things  that  people  want,  and  that  poor 
people  especially  want,  has  brought  about  a  state 
of  things  where  poor  people  have  never  had  decent 
and  adequate  housing."  If  they  have  never  had 
decent  and  adequate  housing  (a  statement  with 
which  I  am  entirely  disposed  to  agree),  how  has  it 
been  brought  about  by  a  stupid  system  of  taxation? 
And  what  is  the  specific  stupidity  referred  to? 


FOR  WORKINGMEN 

Mr.  Ackerman  makes  a  statement,  with  which  I 
am  in  full  accord,  and  which  I  do  not  imagine  Mr. 


118  THE  HOUSING  FAMINE 

Murphy  would  dispute — namely,  that  the  exemption 
from  taxation  of  incomes  from  mortgages,  which  all 
three  of  us  agree  is  a  subsidy,  would  not  prove  a 
sufficiently  large  subsidy  to  start  the  building  of 
houses  for  wage  workers.  The  moderate  profit  which 
Mr.  Murphy  and  I  see  in  the  measure  lies  in  its 
mild  encouragement  of  building  for  higher  paying 
tenants. 

TAX  REFORM  MUST  WAIT  ON  INDUSTRIAL 
REVOLUTION 

Lumping  mortgages  and  improvements  together, 
Mr.  Ackerman  decides  that  exempting  them  from 
taxation  would  not  stimulate  building  under  the 
present  economic  system.  In  other  words,  nothing 
doing  until  we  have  that  industrial  revolution !  Nor 
are  we  afforded  any  light  as  to  what  will  happen 
afterwards.  "What  scheme  of  taxation  should  be 
employed  in  conjunction  with  a  system  of  production 
which  aimed  at  the  production  of  goods  instead  of 
profits,  is  beside  the  point  until  we  are  provided 
with  such  a  system.' * 

Mr.  Ackerman  surely  demands  faith  from  his  fol- 
lowers! We  are  to  jump  blind-folded  out  of  our 
present  frying  pan  without  even  a  theory  as  to  where 
we  are  to  land! 

s  See  The  Tribune  (New  York),  March  22,  1920. 


EXEMPTING  MORTGAGES  AND  IMPROVEMENTS   119 

* 


TOPIC   IV 
SECOND   ARGUMENT 

By  Frederick  L.  Ackerman 

a  SUBSIDY 

It  appears  that  it  is  unanimously  agreed  that, 
under  our  present  scheme  of  taxation,  the  action  sug- 
gested is  to  be  viewed  as  a  subsidy.  Mrs.  Wood 
admits  that  it  is  a  legitimate  subsidy  because  "it 
all  helps.' '  Mr.  Murphy  admits  it — and  advocates 
it  because  he  believes  that  such  a  subsidy  could  not 
be  squandered. 

The  admission  that  the  exemption  of  mortgage 
income  from  taxation  is  a  subsidy  is  important ;  for 
questions  immediately  follow  upon  the  admission. 
A  subsidy  to  what — why  the  differential?  Ap- 
parently that  which  is  to  be  subsidized  is  looked 
upon  as  an  institution  of  a  highly  beneficent  char- 
acter— something  worth  retaining. 

WHY  A  SUBSIDY? 

So  we  return  to  the  question:  Why  the  need  of 
this  differential?  In  arguing  this  point,  Mr.  Murphy 
stages  his  discussion  in  the  present.  He  ignores  the 
drift  of  affairs  during  pre-war  days  and  the  condi- 


120  THE  HOUSING  FAMINE 

tion  which  obtained  before  the  introduction  of  the 
income  tax.  He  forgets  in  this  argument  that  it 
has  not  paid  (financially)  for  a  long  time  to  build 
houses  for  the  lower  paid  wage  workers.  One  should 
not  forget  this. 

As  a  general  proposition,  it  may  be  stated  that 
wages  have  not  been  sufficient  to  provide  the  lower 
paid  wage  workers  with  an  adequate  home;  ade- 
quate homes  cost  too  much.  Of  course  there  is  a 
discrepancy — the  condition  is  a  matter  of  necessity 
to  the  system  of  financial  business  which  controls 
the  processes  of  production.  For  if  all  of  our  labor 
power  were  to  be  directed  into  the  actual  produc- 
tion of  socially  useful  things,  there  could  be  no 
margin  of  profit — no  profit  upon  investment — no  dis- 
crepancy between  pay  and  what  that  pay  would 
purchase. 

Hence  it  should  be  apparent  to  any  one  that  this 
subsidy  is  to  be  viewed  as  a  subsidy  to  that  system 
of  financial  business,  the  purpose  of  which  is  to  main- 
tain this  discrepancy. 

Mr.  Murphy  stresses  the  subject  of  taxation  as 
having  caused  the  shortage  of  this  particular  class 
of  building.  I  ask:  Has  taxation  caused  a  shortage 
of  other  classes  of  buildings  and  does  not  the  income 
from  mortgages  upon  other  classes  of  buildings  bear 
the  same  rate  of  taxation? 

ALL  ABOARD — THE  WHIRLIGIG   STARTS 

In  advocating  the  exemption  from  taxation  of  new 
buildings    designed    for    dwelling    purposes,    Mr. 


EXEMPTING  MORTGAGES  AND  IMPROVEMENTS   121 

Murphy  says :  "For  while  the  results  of  such  a  policy 
would  inure  to  the  benefit  of  the  owner  .  .  .  com- 
petition would  soon  bring  rents  down.  • '  Whereupon 
building  would  cease.  Then  we  might  apply  the 
outright  subsidy  or  state  aid  to  stimulate  building 
so  that  competition  might  speedily  bring  rents  down. 
"Whereupon  building  would  cease.     Then  what? 

The  discrepancy  between  wages  and  the  rent  of 
new  buildings  is  due  to  the  condition  that  through 
our  system  of  financial  business  in  control  of  produc- 
tion, labor  power  is  being  diverted  in  ever  increasing 
volume  from  the  production  of  socially  useful  goods. 
Waste  of  one  sort  and  another  is  being  made  a  source 
of  profit.  Why  attempt  to  solve  this  problem  by 
these  round-about  make-believe  methods  of  produc- 
tion? 


122  THE  HOUSING  FAMINE 


TOPIC    IV 
THIRD   ARGUMENT 

By  John  J.  Murphy 

WHY  A  SOUND,   COMPREHENSIVE,   ECONOMIC  POLICY 
IS  NOT  PRACTICABLE 

I  do  not  consider  "the  exemption  of  improvements 
in  general' '  a  practical  question  at  present,  because 
the  public  mind  is  dominated  by  the  kind  of  "modern 
thought* '  to  which  Mrs.  Wood  referred  earlier,  and 
is  quite  incapable  of  imagining  the  ultimate  benefits 
to  be  derived  from  such  a  policy.  As  I  am  anxious 
to  get  more  houses  now  and  not  to  undertake  public 
education  in  political  economy,  I  only  suggest  those 
things,  which  a  moderate  measure  of  common  sense 
without  much  study,  will  commend  to  a  public  which 
has  much  to  occupy  its  attention. 

EXEMPTION   BETTER  THAN   SUBSIDY 

I  think  I  have  already  covered  Mrs.  Wood's  objec- 
tion to  my  proposal  about  exemption  of  new  build- 
ings. If  there  were  no  other  way  than  by  sub- 
sidizing builders,  I  would  do  it,  but  I  pointed  out 
wherein  my  plan  differs  from  a  subsidy,  and  I  am 
content  to  let  it  rest  there,  with  merely  this  addi- 
tional statement,  that  in  my  mind  it  is  merely  allow- 


EXEMPTING  MORTGAGES  AND  IMPROVEMENTS   123 

ing  landlord  and  tenant  to  retain  what  never  should 
have  been  taken  away  from  them.  It  would  not 
benefit  the  people  who  refused  to  limit  themselves 
to  30%  profit,  for  those  were  the  owners  of  old 
houses  which  would  not  be  affected  by  this  proposal. 

HOW  GOVERNMENT   STUPIDITY  OPPRESSES  THE   POOR 

Finally,  Mrs.  Wood,  you  ask:  "What  is  the  Gov- 
ernment stupidly  taxing  that  poor  people  want?" 
and  I  answer — "Houses !  old  houses,  new  houses,  tall 
houses,  short  houses,  places  to  live  in,  to  work  in 
and  play  in  and  ultimately  to  die  in.  All  these  the 
Government  taxes  as  though  they  were  evils.  Won't 
you  concede  that,  unless  its  act  is  malicious,  we  are 
moderate  in  calling  it  stupid?" 

JUSTICE   THE   ONLY  PERMANENT  REMEDY 

Mr.  Ackerman's  main  contribution  on  this  point 
is  that  a  subsidy  is  an  additional  reward  to  capital, 
which  is  already  getting  too  much.  This  point  has 
been  discussed  above,  in  dealing  with  Mrs.  Wood's 
objection. 

I  entirely  concur  in  Mr.  Ackerman's  view  that 
inadequate  wages  lies  at  the  root  of  the  pre-war  un- 
satisfactory housing  conditions,  and  that  we  must 
establish  a  system  which  will  insure  every  citizen 
the  full  value  of  his  labor  and  his  fair  share  of 
the  social  value  which  he  helps  to  create,  before  the 
housing  problem  can  be  permanently  solved.  For 
the  present  I  have  preferred  to  deal  with  the  imme- 
diate provision  of  tolerable  shelter  for  a  steadily 
increasing  homeless  multitude. 


124  THE  HOUSING  FAMINE 


TOPIC  IV 
THIRD   ARGUMENT 

By  Edith  Elmer  Wood 

shall  we  subsidize  to  improve  health 
or  to  increase  profits? 

We  are  all  agreed,  mirabile  dictu,  that  tax  exemp- 
tions are  subsidies.  I  think  I  have  made  it  suffi- 
ciently clear  that  I  dislike  subsidies  on  principle, 
but  that  if  we  are  to  have  them,  they  should  be 
used  for  the  benefit  of  those  who  need  help  most, 
not  for  those  who  need  it  least.  The  tax  exemption 
subsidy  can  be  used  as  a  lever  to  raise  the  standard 
of  workmen's  housing  and  thereby  benefit  the  gen- 
eral public  health.  It  is  sheer  reckless  waste  to  toss 
it  without  condition,  without  discrimination,  as  Mr. 
Murphy  proposes,  to  the  millionaire  erecting  a 
palatial  home  for  himself,  and  to  the  speculative 
builder  throwing  together  a  flimsy,  race-suicide  apart- 
ment house  with  an  ornate  front  door. 

THE   TEMPORARY   SHORTAGE   SEEMS   TO   BE    CURING 
ITSELF   WITHOUT   SUBSIDIES 

The  average  number  of  new  dwellings  built  yearly 
in  the  United  States  between  1910  and  1917  was 


EXEMPTING  MORTGAGES  AND  IMPROVEMENTS   125 

about  400,000.  "1918  saw  only  20,000  new  houses 
built.  1919  was  a  little  better  with  70,000.  "4  We 
assume  that  Mr.  Murphy  is  correct  in  his  statement 
that  nearly  a  billion  dollars  worth  of  dwellings  were 
contracted  for  during  that  year.  If  so,  it  certainly 
indicates  (making  all  due  allowances  for  increased 
building  costs)  a  phenomenally  rapid  resumption  of 
home  building  taking  place  without  artificial  stimula- 
tion. It  goes  far  to  justify  my  belief  that  we  do 
not  need  to  become  unduly  excited  over  the  present 
shortage  of  high-cost  and  middle-cost  dwellings,  in 
spite  of  the  outcry  raised  by  those  who  are  tem- 
porarily inconvenienced. 

4  See  Article  by  Wharton  Clay  in  Engineering  and  Contracting, 
March  24,  1920. 


126  THE  HOUSING  FAMINE 


TOPIC   IV 

THIRD   ARGUMENT 

By  Frederick  L.  Ackerman 

MUCH  TALK   ABOUT  A   PHRASE.      WANTED — A  LITTLE 
MORE   COMMON   SENSE 

It  was  not  my  intention  in  my  first  argument  to 
confine  the  issue  to  the  single  tax.  I  then  stated 
my  position  definitely  with  respect  to  this  matter. 
I  confined  my  argument  to  showing  that  the  several 
measures  were  all  of  relatively  little  importance 
under  the  working  of  the  present  economic  indus- 
trial system.  In  dealing  with  the  subject  of  taxa- 
tion, I  take  the  ground  that  the  solution  of  the 
problem  under  discussion  is  to  be  found  through 
effectively  dealing  with  the  broad  subject  of  the 
unearned  increment  and  profit,  not  as  applied  to 
profit  in  land  alone  but  as  applied  to  the  general  field 
of  investment. 

what's  in  a  name  anyway? 

Both  of  my  opponents  seem  to  be  greatly  inter- 
ested in  what  they  refer  to  as  my  "  Industrial  Revolu- 
tion.' '    They  are  apparently  much  more  interested 


EXEMPTING  MORTGAGES  AND  IMPROVEMENTS    127 

in  this  phrase  than  they  are  in  the  common  sense 
idea  around  which  my  entire  argument  revolves.  I 
am  dealing  with  the  elimination  of  wastes,  losses, 
curtailments  and  cancellation  of  effort  which  arise 
out  of  our  system  of  competition  in  terms  of  price. 

IS  IT  NOT   COMMON  SENSE? 

My  proposal  may  be  termed  an  industrial  revolu- 
tion if  one  so  chooses.  I  admit  that  what  I  propose 
involves  a  fundamental  change.  But  what  of  that? 
Thus  far  neither  of  my  opponents  have  dealt  with 
my  major  contention  which  I  insist  upon  is  nothing 
but  common  sense.  I  am  seeking  to  install  a  reign 
of  common  sense  into  our  system  of  production  and 
distribution  by  eliminating  that  one  factor  which 
so  operates  as  to  inhibit  us  from  producing  for  use. 


TOPIC  V 
HOW  SHALL  WE  DEAL  WITH  CONGESTION? 


TOPIC  V 
FIRST   ARGUMENT 

By  John  J.  Murphy 

1.  Private  appropriation  of  annual  land  value  is  chief 

obstacle  in  the  way  of  curing  congestion.  Zon- 
ing regulation  is  the  best  practical  plan  yet  de- 
vised, but  it  has  not  stood  the  test  of  wide' 
application. 

2.  Mrs.  Wood  enumerates  the  methods  now  in  vogue 

for  dealing  with  the  difficulty,  but  without  prov- 
ing that  they  are  at  all  commensurate  with  the 
task. 

3.  Mr.  Ackerman's  remedy  is  "a  redistribution  of 

Economic  Power,' '  which  may  mean  anything. 

HAVE   CITIES   PASSED   POINT   OF   MAXIMUM 
ECONOMICAL  POPULATION? 

That  population  in  our  great  cities  has  been  so 
congested  as  to  produce  great  evils  is  too  generally 
recognized  to  be  questioned.  Indeed,  the  steadily 
mounting  figures  of  city  budgets  justify  the  pre- 
sumption that  we  have  passed  the  point  where  con- 
centration of  population  produces  economy  of  effort 

131 


132  THE  HOUSING  FAMINE 

or  service,  and  that  henceforth  additions  to  popula- 
tion may  be  a  financial  loss  rather  than  a  gain.  If 
this  assumption  should  prove  true,  it  will  take  care 
of  itself. 

PRIVATE     APPROPRIATION     OF     RISE     IN     LAND     VALUES 
DEFEATS   BENEFITS   OF  IMPROVED  TRANSPORTATION 

Already  among  city  dwellers  a  back-to-the-land 
sentiment  is  growing,  not  to  such  an  extent  as  the 
forward-to-the-city  movement  which  the  war  has 
started  in  rural  districts,  but  still  of  considerable 
proportions.  Naturally  one  thinks  of  improved 
transportation  as  one  of  the  most  necessary  aids 
in  solving  the  congestion  problem,  but  so  far  it  has 
not  been  as  helpful  as  was  once  hoped.  Extending 
railway  systems  causes  lots  to  rise  in  price  enormously 
along  their  lines,  and  so  the  dweller  in  the  suburbs 
finds,  when  commutation  fare  and  oth^r  expenses 
incidental  to  living  out  of  town  are  considered,  that 
it  is  as  economical  for  him  to  pay  high  rent  in  the 
city  as  to  pay  lower  rents  in  the  suburbs.  He  gets 
more  light,  air,  and  pleasanter  surroundings  for  a 
few  hours  a  day,  but  that  is  all. 

WHY  TOWN  PLANNING  FAILS 

The  town  planning  idea  has  many  attractive  pos- 
sibilities, but  unless  some  great  corporation,  or  some 
branch  of  the  Government  can  be  induced  to  do  these 
things,  no  very  material  benefit  comes.  "When  such 
projects  are  launched  by  cities  as  desirable  possibili- 


HOW  SHALL  WE  DEAL  WITH  CONGESTION?     133 

ties,  the  prices  of  land  within  the  area  rise  more 
than  adjacent  property,  and  so  the  town  planners' 
scheme  becomes  merely  an  adjunct  to  some  real  estate 
boom. 

LAND   SPECULATION  AND   DEPOPULATION 

If  the  people  or  their  representatives  could  under- 
stand or  devise  a  method  of  applying  to  public  use 
the  social  increment  due  to  such  improvements,  the 
problem  would  soon  be  solved,  but  as  long  as  holders 
of  vacant  lands  see  an  opportunity  to  make  profits 
out  of  land  developments,  so  long  will  the  solution 
of  the  problem  of  congestion  be  the  dream  of  well- 
meaning  visionaries.  That  the  evil  menaces  the  very 
life  of  our  nation  and  civilization  no  one  can  ques- 
tion. Children  are  not  merely  undesirable ;  they  are 
impossible  at  present  prices  for  living  space.  If  they 
do  happen  to  get  born,  there  is  no  place  for  them 
to  grow  and  develop. 

FUTILITY  OF  REGULATION 

There  are  those  who  see  in  this,  as  in  other  cases, 
a  call  for  Government  intervention.  Let  the  city  or 
the  state  prescribe  the  maximum  number  of  people 
to  the  acre,  of  stories  to  the  house,  of  houses  to 
the  block.  Such  regulations  might  be  adopted  for 
new  sections,  but  the  old  areas  would  remain  un- 
changed, and  congestion,  which  like  cancer,  is  a 
fatal  disease,  will  continue  to  grow  and  harden. 
Condemnation  of  congested  areas  and  reconstruction 


134  THE  HOUSING  FAMINE 

by  the  city  authorities  is  sometimes  urged  as  a 
remedy,  but  in  a  city  like  New  York  the  task  has 
become  too  colossal  to  be  seriously  considered :  noth- 
ing but  some  new  process  as  powerful  as  that  which 
drew  the  population  together  can  disintegrate  it. 

WILL   THE   DISEASE   CURE   ITSELF? 

Perhaps  that  process,  in  spite  of  the  apparent 
growth  of  the  cities,  is  now  under  way.  Prices  of 
food  products  are  rising  from  numerous  causes,  but 
not  the  least  among  them  is  the  withdrawal  of  labor 
from  rural  sections.  Agricultural  pursuits,  like  many 
other  kinds  of  necessary  and  useful  labor,  have  been 
treated  with  contempt  by  dwellers  in  cities.  The 
really  necessary  occupations  are  coming  into  their 
own,  and  the  merely  ornamental  are  being  relegated 
to  their  true  position.  The  probabilities  seem  to  be 
that  the  logic  of  events  will  take  care  of  the  conges- 
tion problem  by  forcing  people  back  into  the  primitive 
extractive  industries. 


HOW  SHALL  WE  DEAL  WITH  CONGESTION?    135 


TOPIC   V 
FIRST  ARGUMENT 

By  Edith  Elmer  Wood 

1.  We  must  prevent  the  spread  of  congestion  by 

town-planning,  zoning,  cheap  transportation, 
and  public  ownership  of  land.  We  must  destroy 
existing  congestion  by  wholesale  slum  clearance. 

2.  Mr.  Murphy  thinks  congestion  is  a  dispensation 

of  Providence. 

3.  Mr.  Ackerman  regards  cities  as  the  handiwork  of 

the  Evil  One. 

PREVENTION  AND   CURE 

Congestion  is  a  relative  term.  It  means  a  gather- 
ing together  in  a  mass.  We  are  talking  about  con- 
gestion in  a  pathological  sense — a  gathering  so  ex- 
cessive as  to  endanger  health,  clog  transportation, 
pervert  economic  values  and  put  obstacles  in  the 
way  of  family  life.  Can  we  prevent  it  where  it  has 
not  yet  occurred?  By  persuasion?  Or  by  fiat?  Can 
we  undo  it  where  it  has  occurred?    And  how? 

PREVENTION   BY   EDUCATION 

Prevention  by  the  educational  method  is  the  best 
of  all,  so  far  as  it  goes,  and  forms  the  necessary 


136  THE  HOUSING  FAMINE 

basis  of  any  other  method;  for  unless  a  favorable 
public  opinion  is  created,  coercion  is  out  of  the 
question. 

So  by  all  means,  let  us  have  back-to-the-land  move- 
ments and  garden  city  movements,  and  let  us  keep 
hammering  at  manufacturers  till  they  see  it  is  to 
their  interest  to  put  their  plants  where  land  is  cheap 
and  plentiful  and  where  they  can  have  a  well-housed 
and  therefore  stable  labor  force  within  walking 
distance  of  their  work. 

PREVENTION   BY   INDUCEMENT 

Let  us  do  all  we  can  to  make  country  life  attrac- 
tive enough  to  hold  the  young  people  on  the  farms. 
Let  us  multiply  cheap  transportation  to  open  up 
suburban  areas  to  the  city  dweller. 

Much  is  done  in  Europe  by  specially  priced  work- 
men's trains  at  certain  hours  of  the  day.  In  Bel- 
gium, for  instance,  along  with  the  housing  loans, 
this  system  has  drawn  thousands  of  city  workmen 
into  the  country,  whence  they  go  to  their  work  every 
morning  on  a  train  which  carries  them  for  only  a 
fraction  of  the  regular  fare. 

PBEVENTION  BY  TOWN  PLANNING  AND  RURAL  DEVELOP- 
MENT.     ZONING. 

All  these  methods  are  good,  but  they  are  not 
enough.  We  must,  as  we  want  our  country  to  thrive, 
at  least  call  a  halt  on  the  further  progress  of  con- 
gestion.   Fortunately,  town  planning  will  do  it.  But 


HOW  SHALL  WE  DEAL  WITH  CONGESTION?    137 

there  is  no  time  to  lose.  Every  un-built-on  urban 
and  suburban  area  must  be  town  planned,  every 
rural  area  must  be  included  in  a  rural  development 
scheme,  and  there  must  be  no  corner  left  in  which 
unregulated  congestion  can  occur.  This  will  require 
state-wide  town  planning  and  development  laws 
(since  we  cannot  have  national  ones),  and  they  must 
be  mandatory,  or  the  communities  which  need  them 
most  will  neglect  to  use  them.  No  one  will  be  harmed 
except  the  exploiter.  Legitimate  property  values 
will  be  conserved,  as  well  as  human  life  and  happi- 
ness. 

Zoning  regulations  divide  cities  into  districts 
where  varying  heights  of  buildings  are  permitted 
and  varying  percentage  of  lot  may  be  built  on.  These 
regulations  are  not  retroactive.  They  affect  future 
building  only.  Their  function  is  to  prevent  conges- 
tion from  spreading  beyond  the  bounds,  and  within 
those  bounds  beyond  the  degree  it  has  already  at- 
tained. Districting  by  use,  or  the  protection  of 
residence  districts  from  invasion  of  factories  and 
business,  is  also  helpful. 

PREVENTION   BY   CITY   OWNERSHIP   OF  LAND 

The  tendency  to  speculate  in  land,  to  run  up  the 
price  of  suburban  tracts  as  soon  as  a  new  transit 
system  makes  it  available  for  dwellings,  till  it  is  as 
dear  as  the  city  land  it  ought  to  relieve  and  eventu- 
ally as  congested,  is  something  that  can  be  held  in 
check  if  we  choose  to  do  it. 


138  THE  HOUSING  FAMINE 

German  cities  have  solved  the  problem  by  quietly 
buying  up  land  as  opportunity  offered,  both  within 
and  without  the  city.  Ulm  owns  80  per  cent  of  its 
area,  but  that  is  an  extreme  case.  Even  a  10  per 
cent  holding  of  suburban  land  will  check  the  activi- 
ties of  the  real  estate  promoter  very  materially. 

We  cannot  do  this  without  amending  our  state 
constitutions,  nor  without  revising  some  of  our  con- 
ceptions of  municipal  functions.  But  there  is  plain 
business  horse  sense  in  the  method,  and  there  is  a 
quarter  of  a  century  of  German  experience  in  which 
to  study  its  workings. 

CUKE   BY   SLUM   CLEARANCE 

Where  excessive  congestion  already  exists  in  its 
most  menacing  form,  there  is  no  known  cure  except 
through  a  major  surgical  operation.  The  only  effec- 
tive way  to  get  rid  of  slums  is  for  the  city  to  buy 
them  up  by  the  acre  and  clear  them  off.  English 
cities  have  been  doing  it  for  half  a  century,  con- 
tinental cities  for  more  than  a  quarter  century.  In- 
creasingly, of  late  years,  instead  of  trying  to  re-house 
the  people  on  the  same  area,  they  have  been  trans- 
planted to  garden  suburbs  and  the  cleared  land  sold 
for  business  purposes. 

Slum  clearance  undertakings  have  lessened  sick- 
ness and  inefficiency.  They  have  cut  death-rates 
squarely  in  two.  And  some  of  them  have,  in  addi- 
tion, made  an  actual  dollars-and-cents  profit  for 
the  city.  And  yet,  we,  the  richest  people  in  the 
world,  think  we  cannot  possibly  afford  them. 


HOW  SHALL  WE  DEAL  WITH  CONGESTION?    139 


TOPIC   V 
FIRST  ARGUMENT 

By  Frederick  L.  Ackerman 

1.  "Back  to  Farm"  movement  runs  into  an  economic 

difficulty.  System  of  price  competition  "goes 
round  the  end."  Restrictive  legislation  runs 
up  a  blind  alley.  Whole  questions  hangs  on 
financial  industrial  system.  Solution:  a  redis- 
tribution of  economic  power. 

2.  Mrs.   Wood  continues  to  ignore  the   economic 

forces  which  suck  people  into  cities.    Advocates 
a  variety  of  palliatives  of  no  consequence. 

3.  Mr.  Murphy  would  "leave  it  to  George/ ' 

Popular  opinion  on  this  head  runs  largely  in  the 
direction  of  "stimulating' '  farm  ownership  through 
the  use  of  state  credit;  or  assisting  the  farmer  in 
various  ways  through  such  activities  as  those  car- 
ried on  by  the  Departments  of  Agriculture,  State 
and  Federal,  etc.  There  are  also  schemes  of  rural 
education  organized  with  this  end  in  view. 

All  of  this  effort  is  looked  upon  by  most  people 
as  of  a  beneficent  character — something  to  bo 
promoted  as  a  practical  way  of  bringing  about  a 


140  THE  HOUSING  FAMINE 

redistribution  of  population.  A  clue  to  what 
animates  such  action  on  the  part  of  dwellers  in  indus- 
trial centers  may  be  expressed  by  saying  that  it  is 
a  great  comfort  to  such  to  have  wages  up  and  the 
cost  of  food  down. 


But  under  the  guiding  forces  of  business  enter- 
prise, operated  through  a  system  of  price  competi- 
tion, what  is  certain  to  follow  upon  any  considerable 
increase  in  rural  population  or  any  considerable 
increase  of  agricultural  production,  is  to  reduce  the 
price  of  what  is  raised  on  the  farm.  Precisely  what 
benefits  would  accrue  to  the  rural  population  under 
such  a  plan  is  not  at  all  clear.  This  is  pointed  out 
in  order  to  reveal  how  it  is  that  our  entire  economic 
system  is  working  at  cross  purposes  and  against  any 
such  plan  of  action.  That  such  is  the  case  does  not 
hang  upon  economic  theory.  For  so  soon  as  an 
agricultural  group  shows  signs  of  organizing  and 
adopting  the  methods  of  the  financial  business  sys- 
tem which  exercises  control  over  industrial  produc- 
tion, and  so  soon  as  it  is  observed  that  such  a  group 
(the  rural  community)  is  about  to  apply  the  prin- 
ciples of  price  competition,  and  thus  curtail  output 
in  order  to  keep  prices  up — all  this  due  regard  for 
bringing  about  a  redistribution  of  population 
through  bettering  the  conditions  of  the  farmer  goes 
by  the  boards.  It  does  not  look  as  if  the  solution 
of  the  problem  was  to  be  found  along  this  line  of 
approach. 


HOW  SHALL  WE  DEAL  WITH  CONGESTION?    141 


RESTRICTIVE  LEGISLATION   IN   A   BLIND   ALLEY 

For  half  a  century  we  have  attempted  to  deal 
with  this  problem  within  our  cities  by  a  variety  of 
restrictive  legislative  enactments  such  as  tenement 
house  laws,  zoning  ordinances,  etc.  These  are  all 
in  the  nature  of  disallowances  of  property  rights. 
But,  on  the  whole,  the  right  of  the  individual  to 
the  benefit  of  any  increase  in  property  value  which 
may  arise  as  a  result  of  an  increase  of  population 
is  not  appreciably  curtailed.  To  carry  these  restric- 
tive measures  beyond  this  point  would  be  construed 
as  unconstitutional.  Hence  it  would  appear  that 
these  laws  can  have  little  bearing  upon  this  particular 
question  so  long  as  we  hold  to  our  present  concept 
of  what  constitutes  property  rights.  To  frame 
restrictive  legislation  of  such  a  character  as  to  make 
it  really  effective  in  dealing  with  the  problem  of  con- 
gestion would  amount  to  a  disallowance  of  the  right 
to  the  unearned  increment.  So  this  problem,  so  far 
as  restrictive  legislation  is  concerned,  resolves  itself 
into  a  question  of  investment  for  profit. 

QUESTION  HANGS  ON  INDUSTRIAL  SYSTEM 

But  returning  to  the  question.  How  shall  we  deal 
with  congestion  of  population?  The  answer  to  this 
vital  question  is  not  to  be  stated  in  simple  terms. 
The  most  that  may  reasonably  be  hoped  for  is  a 
clue  to  the  riddle.  This  much  may  be  stated:  there 
is  not  the  slightest  hope  of  changing  the  drift  of 


142  THE  HOUSING  FAMINE 

population  which  has  been  running  toward  industrial 
centers,  until  the  modern  industrial  system  shall 
have  begun  to  move  in  the  direction  of  decentraliza- 
tion. 

Precisely  what  changes  may  take  place  in  the 
future  in  the  working  of  our  intricate  financial  in- 
dustrial system,  no  one  may  predict  with  any  degree 
of  certainty:  but  it  is  asserted  that  no  changes  in 
the  direction  of  a  decentralization  of  industry  will 
take  effect  which  are  not  an  outgrowth  of  the  enter- 
prise itself.  That  is  to  say,  no  political  action  can 
possibly  be  effective,  since  to  be  effective  in  bringing 
about  the  redistribution  of  population,  the  action 
would  have  to  make  its  appeal  as  a  desirable  business 
proposition.  At  the  present  juncture,  it  can  not  be 
stated  in  such  terms. 

But  to  bring  this  argument  into  more  concrete 
form,  we  may  say  that  congestion  of  population  is 
a  consequence  of  the  concentration  of  industry.  Of 
course,  there  are  other  factors  which  operate  in  this 
direction,  but  by  and  large,  it  is  the  sweep  of  modern 
business  enterprise,  operating  in  control  of  the 
machine  process  which  sets  in  motion  and  sustains 
the  drift  of  population  in  the  modern  world. 

Hence,  given  the  present  conditions,  economic  and 
industrial,  under  which  production  is  carried  on, 
it  would  appear  that  the  only  way  to  bring  about 
a  redistribution  of  population  would  be  to  bring 
about  an  equalization  of  investment  opportunity. 
That  is  to  say,  to  equalize  the  earnings  upon  invest- 
ment. 


HOW  SHALL  WE  DEAL  WITH  CONGESTION?     143 

Concentration  of  industry  is  consequent  upon  con- 
centration of  economic  power  through  the  agency 
of  loan  credit  and  competition  in  terms  of  price. 
Whether  or  not  we  may  deal  with  the  problem  of 
congestion  of  population  depends  in  final  analysis 
upon  whether  or  not  we  can  effect  a  redistribution 
of  economic  power.  Again  it  looks  as  if  our  only 
avenue  of  approach  was  the  disallowance  of  invest- 
ment for  a  profit. 


144  THE  HOUSING  FAMINE 


TOPIC   V 
SECOND   ARGUMENT 

By  John  J.  Murphy 

BEGINNINGS  OF   CONGESTION  IN  EUROPE 

Very  little  prospect  of  relief  from  congestion  is 
held  out  by  either  of  my  opponents'  proposals.  As 
a  matter  of  fact,  modern  congestion  is  due  to  easily 
recognized  causes.  The  situation  in  European  cities 
and  in  American  cities  is  quite  distinct.  In  Europe, 
most  cities  hark  back  to  an  early  time  when  defense 
was  a  chief  consideration ;  the  circular  shape  of  most 
cities  there  witnesses  to  the  desire  of  their  builders 
to  enclose  the  largest  possible  area  within  the  small- 
est defensible  boundary.  People  preferred  living 
crowded  within  the  walls  to  dying  with  plenty  of 
space  outside. 

CAUSES  IN  AMERICA 

Few,  if  any,  American  cities  were  designed  with 
a  view  to  military  defense.  They  were  built  for 
business  purposes  fortuitously,  of  course,  for  in  their 
beginning  no  one  could  tell  for  certain  where  a 
city  would  be,  or  how  it  would  develop.    Hence  they 


HOW  SHALL  WE  DEAL  WITH  CONGESTION?    145 

run  to  the  rectangular.  They  afford  more  of  the 
artificial  amenities  of  life  than  do  rural  districts 
and  the  diversified  occupations  which  they  house 
offer  possibilities  of  earning  a  livelihood  to  all  sorts 
of  people. 

Consequently,  the  progressive-minded  youth  in 
each  generation  abandon  the  ancestral  homestead 
to  find  jobs  in  cities,  and  those  who  succeed  go  back 
and  impress  the  stay-at-homes  with  their  clothes  and 
their  airs  of  easy  living.  As  it  is  the  quick-witted 
and  enterprising  who  are  apt  to  go,  the  stay-at-home 
population  falls  more  and  more  below  normal  in 
its  standards. 

INCREASING  VALUE   OF  LAND 

The  result  of  this  crowding  into  cities  and  towns 
is  increase  in  the  price  of  land  and  those  fortunate 
enough  to  own  farms  in  or  near  towns  advertise 
to  all  the  country  around  the  advantages  of  their 
town  as  a  place  of  residence,  with  the  result  that 
prices  rise  and  more  advertising  is  done.  Thus  a 
surplus  population  is  formed  and  large  scale  manu- 
facturing is  developed  which  depends  for  its  success 
on  abundant,  cheap  labor. 

VALUES  AND  CORNS 

My  contention  is  that  this  condition  can  be  held 
within  reasonable  limits  absorbing  land  values  in 
taxes  as  fast  as  they  arise,  so  that  no  interest  shall 
arise  in  speculating  in  land.     It  must  be  clear  to 


146  THE  HOUSING  FAMINE 

all  that  as  land  rises  in  value,  population  must  be- 
come more  dense  in  order  to  pay  the  rents  which 
such  values  necessitate.  If  we  keep  down  the  cause, 
the  effect  will  take  care  of  itself.  The  evil  has  been 
of  slow  growth,  the  cure  must  be  slow,  if  it  is  to 
be  effected  without  catastrophe.  Corns  are  slowly 
acquired;  cutting  them,  though  necessary  at  times, 
seems  to  encourage  rather  than  discourage  them; 
proper  footwear,  or  going  barefoot  seems  the  only 
permanent  way  to  eliminate  them.  There  are  many 
analogies  between  social  evils  and  corns  which  re- 
formers would  do  well  to  study,  and  from  which 
they  might  derive  wisdom. 


HOW  SHALL  WE  DEAL  WITH  CONGESTION?    147 


TOPIC  V 
SECOND   ARGUMENT 

By  Edith  Elmer  Wood 

individualism  has  no  remedy  to  offer 

I  want  to  call  the  reader's  attention  to  the  fact 
that  although  Mr.  Murphy  admits  that  "The  evil 
(of  congestion)  menaces  the  very  life  of  our  nation 
and  civilization, ' '  he  offers  absolutely  no  remedy  for 
this  critical  condition.  So  impotent  is  the  philosophy 
of  individualism  to  cure  the  ills  it  has  itself  produced. 
The  best  he  can  do  is  to  hope  that  blind  forces  which 
have  so  far  set  towards  congestion,  will  turn  around 
by  and  by  and  set  in  the  opposite  direction.  "The 
probabilities  seem  to  be,"  he  tells  us  optimistically, 
"that  the  logic  of  events  will  take  care  of  the  con- 
gestion problem  by  forcing  the  masses  into  the 
primitive  extractive  industries."  Does  he  mean 
when  so  much  of  the  rural  population  has  come  to 
the  cities  that  the  remnant  can't  raise  enough  food 
to  go  around?  That  point  is  not  reached  yet,  and 
when  it  is,  will  only  force  back  enough  people  to 
raise  the  necessary  food.  So  it  affords  no  hope  of 
lessening  the  degree  of  congestion  we  now  have. 


148  THE  HOUSING  FAMINE 


THE   UNEAKNED   INCREMENT 

Mr.  Murphy  does  say  one  other  thing:  "If  the 
people  or  their  representatives  could  understand  or 
devise  a  method  of  applying  to  public  use  the  solid 
increment  due  to  such  improvement,  the  problem 
would  soon  be  solved."  This  can  only  be  a  veiled 
allusion  to  Mr.  Murphy's  well-known  adherence  to 
the  single  tax  doctrine,  which  he  evidently  regards 
as  beyond  the  intelligence  of  the  people  and  their 
representatives.  Probably  what  keeps  him  from 
advancing  it  openly  is  the  consciousness  of  its  incon- 
sistency with  the  doctrine  of  individualism  which 
he  is  supporting. 


CONGESTION   MUST  WAIT  FOR  INDUSTRIAL   REVOLUTION 

"There  is  not  the  slightest  hope  of  changing  the 
drift  of  population  which  has  been  running  towards 
industrial  centers,  until  the  modern  industrial  sys- 
tem shall  have  begun  to  move  in  the  direction  of 
decentralization.  \ %  I  hoped  for  a  moment  that  Mr. 
Ackerman  had  discerned  Mr.  Murphy's  "logic  of 
events,"  and  that  between  the  two  I  might  arrive 
at  an  idea  of  what  that  beneficent  thing  was.  But, 
no — Mr.  Ackerman 's  last  words  are:  "It  looks  as 
if  our  only  avenue  of  approach  was  the  disallowance 
of  investment  for  a  profit,"  so  evidently  we  must 
not  expect  to  lessen  congestion  till  we  have  got  rid 
of  our  existing  civilization. 


HOW  SHALL  WE  DEAL  WITH  CONGESTION?    149 


BUT  WILL  THAT  HELP? 

Just  here  a  painful  thought  obtrudes  itself.  How 
do  we  know  that  doing  away  with  the  profit  system 
will  undo  congestion?  Why  should  it?  If  it  wasn't 
that  such  a  lot  of  people  actually  like  cities,  actually 
prefer  them  to  small  towns  and  country — because 
of  movies,  of  shop  windows,  of  the  very  prevalence 
of  their  fellow  beings — there  wouldn't  be  much  con- 
gestion to  cure.  There  are  jobs,  wages,  food,  houses, 
waiting  in  the  country,  and  people  won't  go  to  them. 
Why  should  they  do  so  after  Mr.  Ackerman's  revolu- 
tion? And  think  how  discouraging  it  would  be  if 
we  amputated  a  finger  to  cure  a  blister,  and  then 
found  the  blister  was  ou  another  finger,  after  all! 


150  THE  HOUSING  FAMINE 


TOPIC  V 
SECOND   ARGUMENT 

By  Frederick  L.  Ackerman 

MR.  MURPHY  SUGGESTS  PATIENCE 

If  I  get  it,  Mr.  Murphy's  argument  may  be  sum- 
marized by  saying  that  if  we  are  very,  very  patient, 
the  present  financial  system  will  ultimately  so 
operate  as  to  remove  all  cause  for  worry.  He  says, 
in  effect  " Leave  it  to  George.' ' 

Mr.  Murphy  presumes.  He  presumes  that  "we 
have  passed  the  point  where  concentration  of  popu- 
lation produces  economy  of  effort  and  service  and 
that  henceforth  additions  to  population  may  be  a 
financial  loss  rather  than  a  gain."  Now  look!  In 
the  very  next  paragraph  he  says  that  the  "forward- 
to-the-city-movement,,  is  now  running  ahead  of  the 
1 '  back-to-the-land  sentiment.  ' ' 

"What  does  this  mean?  He  states  two  conditions 
of  fact :  The  present  condition  as  regards  congestion 
is  to  be  rated  as  a  losing  game  economically;  but 
we  still  prefer  to  play  the  game.  By  bringing  these 
two  statements  together  he  makes  it  quite  plain  to 
anyone  that  economic  ends  and  financial  exigencies  are 


HOW  SHALL  WE  DEAL  WITH  CONGESTION?     151 

not  to  be  viewed  as  one  and  the  same  thing— which 
is  precisely  what  I  am  trying  very  hard  to  make 
clear. 

HOW  LONG  MUST  WE  WAIT? 

It  may  not  be  good  from  the  standpoint  of 
economics  to  have  congestion  of  population  and  slums 
and  abandoned  farms — but  it  is  good  for  business — 
at  least  so  much  is  to  be  gathered  from  the  facts  of 
the  case  as  presented  by  Mr.  Murphy.  It  is  true, 
congestion  may  become  so  great  as  to  become  finan- 
cially unprofitable  to  the  individual  who  secures  his 
profit  out  of  stimulating  congestion.  But  how  long 
will  we  wait  ?  How  much  more  congestion  must  we 
stand?  I  think  I  see  a  reason  here  for  suggesting 
a  disallowance  of  investment  for  a  profit. 

Mr.  Murphy  says:  " Nothing  but  some  process  like 
that  which  drew  the  population  together  can  dis- 
integrate it."  How  about  suggesting  a  new  process 
unlike  that  which  drew  the  population  together — if 
we  are  to  redistribute  population?  If  concentration 
of  population  was  a  consequence  of  concentration 
of  economic  power,  how  about  trying  redistribution 
of  economic  power  as  a  means  to  this  end? 

I  GROW  SUSPICIOUS 

Mrs.  Wood's  argument  completely  ignores  the 
causes  which  have  operated  to  make  people  act  as 
they  do  in  the  modern  world.  "Prevention  by  educa- 
tion.' '     I  grow  suspicious.     For  is  it  not  true  that 


152  THE  HOUSING  FAMINE 

at  the  present  moment  forces  are  being  marshaled 
to  " educate"  everybody  into  believing  that  our 
present  financial  business  system  is  to  be  viewed  as 
the  solid  foundation  of  our  national  life?  Is  it 
not  also  true  that  it  is  this  complex  mechanism  which 
has  made  for  the  present  condition  of  chaos. 

"Cheap  transportation  to  open  up  suburban  areas 
to  the  city  dwellers' '  is  not  much  of  a  i 'solution' ' 
if  one  happens  to  look  upon  such  transportation  as 
largely  waste.  And  town  planning  is  set  down  by 
Mrs.  Wood  as  a  way  out.  We  have  all  been  fooled  by 
this  idea  at  some  time  in  our  study  of  the  question. 
Town  planning  is  a  technique.  It  is  not  a  force. 
The  effect  of  concentration  of  economic  power  is 
completely  ignored  by  Mrs.  Wood  and  Mr.  Murphy. 
So  I  ask:  has  this  no  bearing  upon  congestion  of 
population?  Is  it  not  the  principal  factor  to  be  dealt 
with? 


HOW  SHALL  WE  DEAL  WITH  CONGESTION?    153 


TOPIC   V 
THIRD   ARGUMENT 

By  John  J.  Murphy 

INDIVIDUALISM  MISUNDERSTOOD 

If  individualism  were  responsible  for  bringing  the 
world  to  its  present  pass,  it  would  have  few  ad- 
herents, but  alas,  like  Christianity  and  Democracy, 
it  has  had  more  discussion  than  application,  and 
less  comprehension  than  either.  Mrs.  "Wood  does  not 
understand  it,  for  she  deems  it  to  be  inconsistent 
with  the  single  tax  philosophy  which  is  its  highest 
and  most  logical  expression.  Every  single  taxer 
who  understands  his  belief  avows  himself  an  in- 
dividualist. He  and  his  economic  ancestors  have 
been  trying  for  generations  to  keep  Government 
from  muddling  things  with  which  it  has  no  proper 
concern,  but  socialistically  minded  people  have  always 
said,  ''there  ought  to  be  a  law"  to  do  this,  that  and 
the  other. 

BOGUS  INDIVIDUALISTS 

Of  course,  there  are  pseudo-individualists  who, 
having  possession  themselves  of  great  privileges  cob- 


154  THE  HOUSING  FAMINE 

f erred  on  them  by  government,  say,  "Now,  we  want 
the  Government  to  keep  its  hands  off  and  not  inter- 
fere. ' '  Such  were  most  of  the  men  of  the  Manchester 
school,  who  usurped,  without  deserving,  the  name 
of  individualists.  Clearly,  the  man  who  accepts 
favors  from  Government  has  no  standing  when  he 
protests  against  its  interference. 

URGING   FACTS,   NOT  DOCTRINES 

I  preferred,  in  the  discussion  of  the  question  of 
more  housing,  to  avoid  the  appearance  of  seeming 
to  urge  any  special  "isms,"  because  many  people  have 
prejudices  which  close  their  minds  to  consideration 
of  suggestions,  when  they  are  labeled  socialistic, 
syndicalist,  single  tax.  The  great  mass  of  people 
who  must  settle  public  questions  cannot  take  enough 
time  from  earning  a  living  to  really  learn  what  these 
various  philosophies  involve.  The  question  submitted 
for  their  solution  must  be  practical  and  definite. 

PATIENCE   NECESSARY  TO   ANY  WISE   SOLUTION 

Mr.  Ackerman  accuses  me  of  suggesting  patience 
in  dealing  with  congestion.  I  admit  it.  It  is  neces- 
sary in  dealing  with  any  economic  difficulty.  The 
centripetal  force  of  population  has  been  intensifying 
in  every  decade  since  we  took  our  first  census.  All 
efforts  to  modify  it  have  so  far  made  no  impression 
on  its  tightening  coils.  Great  industries  have  moved 
out  of  cities  and  taken  employees  with  them,  but 
with  little  effect  on  intense  crowding.    No  artificial 


HOW  SHALL  WE  DEAL  WITH  CONGESTION?     155 

plan  can  check  this  cancerous  growth.  It  must  be 
attacked  from  the  rural  end.  As  we  want  more 
houses,  we  must  have  more  farms  if  we  are  not  to 
starve,  and  incidentally  starve  the  world,  which  de- 
pends on  us  for  so  much  of  its  food. 


156  THE  HOUSING  FAMINE 


TOPIC  V 
THIRD   ARGUMENT 

By  Edith  Elmer  Wood 

same  old  congestion,  mr.  murphy ! 

Mr.  Murphy  thinks  that  congestion  in  European 
and  American  cities  is  quite  distinct;  that  it  is  due 
in  Europe  to  medieval  crowding  within  walled 
towns;  and  in  America  to  the  attraction  which  the 
city  has  for  the  progressive  minded  rural  youth,  and 
to  the  efforts  of  land  owners  to  bring  more  people 
together  to  buy  lots,  manufacturing  growing  up  as  a 
result  of  surplus  population. 

So  far  as  this  single-tax  explanation  of  congestion 
is  true  of  the  United  States,  it  is  equally  true  of 
Europe.  There,  as  here,  the  over-rapid  growth  of 
cities  followed  the  development  of  machinery  and 
large-scale  manufacturing,  was  accompanied  by 
speculation  in  land,  and  was  fed  by  the  cities'  lure 
for  the  young  people. 

Living  conditions  within  the  walls  of  medieval 
towns  were  undoubtedly  bad,  but  the  walls  have 
nowise  halted  the  spread  of  modern  cities,  and  con- 
gestion is  as  bad  without  as  within  them.    The  once- 


HOW  SHALL  WE  DEAL  WITH  CONGESTION?    157 

walled  city  of  London  is  a  very  small  area  in  the 
heart  of  the  great  metropolis  almost  wholly  given 
over  to  business.  Note  also  Paris  and  Berlin.  Glas- 
gow and  Dublin,  where  congestion  is  greatest  in  the 
United  Kingdom,  never  had  any  walls,  so  far  as  I 
recall,  certainly  not  since  they  have  been  large  cities. 
The  same  holds  for  Liverpool,  Birmingham,  Man- 
chester and  many  more. 

WHAT  IS  THE  MATTER  WITH   EDUCATION? 

Why  is  Mr.  Ackerman  suspicious  of  educational 
methods  ?  How,  if  not  by  educational  methods,  does 
he  intend  to  bring  about  the  introduction  of  his  new 
industrial  system? 


158  THE  HOUSING  FAMINE 


TOPIC    V 
THIRD   ARGUMENT 

By  Frederick  L.  Ackerman 

In  Mr.  Murphy's  argument,  he  gives  some  em- 
phasis to  my  contention  that  it  is  our  system  of  in- 
vestment for  profit  (in  this  case  confined  to  land) 
which  so  operates  as  to  result  in  the  development 
of  urban  centers.  It  appears,  at  least  so  far  as  land 
is  concerned  that  we  are  in  agreement.  Just  why 
Mr.  Murphy  should  draw  the  line  at  land  in  his 
consideration  of  this  matter  of  unearned  increment 
— the  getting  of  something  for  nothing — is  not  very 
clear.  I  can  not  see,  if  it  is  a  valid  argument  in 
the  case  of  land,  why  it  is  not  quite  as  valid  in  the 
case  of  other  investments.  So  far  as  Mr.  Murphy's 
argument  is  concerned,  it  seems  to  me  that  my  main 
contention  still  stands. 

WHAT  MOST   CITIES   PRODUCE 

It  is  clearly  evident  that  Mrs.  Wood  does  not 
think  that  the  modern  industrial  system  (financial- 
business  in  control  of  industry)  is  in  complete  con- 
trol of  affairs  in  general.     She  assumes  that  the 


HOW  SHALL  WE  DEAL  WITH  CONGESTION?    159 

state  (political  government)  may  do  as  it  pleases 
regardless  of  this  system.  I  do  not;  so  therefore 
I  repeat  that  a  redistribution  of  population  is  not 
possible  until  the  modern  industrial  system  shall 
have  begun  to  move  toward  decentralization. 

I  have  taken  for  granted  that  a  checking  of  the 
flow  of  population  into  urban  centers  is  desirable. 
I  say  that  a  redistribution  of  population  is  desirable. 
Mrs.  Wood  wants  to  know  why  I  think  the  dis- 
allowance of  profit  upon  investment  would  undo  con- 
gestion. Well !  The  urban  center  lives  very  largely 
upon  the  profits  derived  from  the  production  of 
waste  and  socially  useless  commodities.  Its  activi- 
ties consist  very  largely  in  socially  useless  services 
(so-called)..  It  is  busily  engaged  in  a  great  variety 
of  enterprises  devoted  to  exploitation  of  one  sort 
and  another.  Eliminate  the  system  of  investment 
for  a  profit  and  the  system  of  price  competition  and 
events  would  soon  move  in  the  direction  of  a  redis- 
tribution of  population  which,  by  the  way,  is  treated 
by  Mrs.  Wood  in  her  last  paragraph  as  if  it  were 
not  so  very  desirable  after  all. 


TOPIC   VI 

HOW  CAN  LAND,  LABOR  AND  MATERIALS  BE 
MADE  AVAILABLE? 


TOPIC   VI 
FIRST   ARGUMENT 
By  John  J.  Murphy 

1.  I  favor  the  taxation  of  land  values,  adequate 

wages  based  on  cost  of  living,  and  recognition 
of  permanent  wage  scales,  so  that  contractors 
may  operate  without  fear  of  loss. 

2.  Mrs.  Wood  seems  but  mildly  interested  in  this 

topic,  for  if  her  panacea,  direct  state  or  city 
action,  can  be  adopted,  all  such  practical  diffi- 
culties will  fade  away  like  mists  before  the  sun. 

3.  As  in  the  millennium  all  the  problems  which  this 

topic  confronts  will  have  disappeared,  Mr. 
Ackerman  is  not  interested  in  finding  a  way  out, 
at  present. 

LAND   SPECULATION  THE   ENEMY 

Naturally  this  proposition  divides  itself  into  three 
parts : 

As  to  Land :  The  quantity  is  ample  and  fixed,  but 
the  supply  is  not  always  available,  due  to  the  expecta- 
tion of  owners  that  at  a  future  time  their  land  may 
be  sold  at  a  profit.    This  mental  attitude  exists  most 

163 


164  THE  HOUSING  FAMINE 

strongly  in  those  parts  of  the  world  where  the  unused 
land  is  assessed  at  a  small  fraction  of  its  selling 
value,  or  not  taxed.  In  such  places  it  costs  little 
to  hold  land  idle  or  inadequately  improved,  and  the 
chance  of  a  windfall  is  always  there.  It  resembles 
a  lottery  ticket  before  the  prizes  are  drawn.  It 
gives  its  owner  a  sense  of  being  in  the  game. 

HOW  LAND   MIGHT   BE   CHEAPENED 

This  attitude  operates  powerfully  against  the  use 
of  land  around  cities  and  lies  at  the  root  of  the 
land  booms,  which  like  cyclones,  occasionally  ravage 
the  country.  If  the  policy  were  adopted  of  taxing 
valuable  land  in  such  a  way  that  its  owner  would 
receive  only  the  full  value  of  his  own  expenditure 
and  labor  upon  it,  or  on  account  of  it,  he  would  not 
be  able  to  capitalize  the  so-called  unearned  incre- 
ment, and  so  land  for  home-building  would  be  every- 
where easier  to  get,  at  prices  which  would  be  within 
the  reach  of  all. 

LABOB  TROUBLES 

As  to  Labor:  There  seems  to  be  no  doubt  that 
the  strained  relations  of  capitalists  and  workmen 
are  now  placing  serious  obstacles  in  the  way  of 
producing  houses.  That  there  are  faults  on  both 
pides  is  not  open  to  serious  dispute.  Labor  organiza- 
tions are  often  arbitrary  and  insistent  on  wasteful 
methods,  whereas  employers'  organizations  have 
shown  themselves  inhuman  and  inconsiderate  when 


HOW  CAN  MATERIALS  BE  MADE  AVAILABLE?     165 

they  have  controlled  the  situation.  The  animosity 
between  the  opposing  forces  is  one  of  the  most  men- 
acing of  our  national  problems. 

NEED   FOR   CONCILIATION 

The  only  solution  of  the  difficulty  lies  in  conciliation. 
Neither  side  can  operate  profitably  without  the  other, 
and  while  either  can  ruin  the  other,  neither  can 
be  saved  without  the  other.  The  real  enemy  of  the 
true  capitalist  and  the  true  laborer  is  the  man  who 
is  legally  privileged  to  extract  from  both  products 
of  their  joint  labor,  without  giving  any  return. 

Employers  who  do  not  realize  that  in  spite  of 
nominal  high  wages,  the  average  workman  is  not 
better  off  than  before  the  war,  stand  in  the  way 
of  a  real  adjustment.  Similarly,  employees  must 
be  made  to  understand  that  unless  binding  agree- 
ments can  be  entered  into  concerning  the  normal 
construction  periods  of  buildings,  contractors  can- 
not make  prices  and  much  work  will  be  held  up. 

RAILROAD   PREFERENCE   FOR   BUILDING   MATERIALS 

As  to  Materials:  The  causes  of  the  shortage  and 
high  prices  of  building  materials  are  numerous. 
Prices  are  from  four  to  five  times  what  they  were 
in  the  pre-war  period.  The  most  important  cause 
of  the  shortage  is  probably  lack  of  adequate  trans- 
portation. The  transportation  systems  of  the  United 
States  and  Canada  are  insufficient  to  transport  all 
the   traffic    offered.      Other   classes    of   freight    are 


166  THE  ^HOUSING  FAMINE 

more  profitable  to  handle,  while  the  ratio  of  freight 
paid  to  the  total  cost  of  the  article  is  higher  on 
building  materials  than  on  commodities  in  general. 
Therefore  increase  of  freight  charges  on  building 
materials  enhances  the  cost  of  construction  greatly. 
Some  plan  should  be  devised  whereby  the  railroads 
may  be  compelled  to  give  preference  to  building 
material  over  other  articles  not  so  essential. 


MONOPOLY  PRICES 

Another  and  important  contributing  factor  to  the 
high  price  of  materials  is  the  close  combination  which 
seems  to  exist  among  the  manufacturers  of  such 
articles.  It  is  not  easy  to  suggest  how  this  can  be 
broken  down  at  the  present  time.  The  attempts 
of  the  Government  to  depress  combinations  in  re- 
straint of  trade  are  merely  farcical.  The  public  has 
not  benefited  in  the  least  by  attempts  to  disintegrate 
such  combinations.  Under  the  new  forms  they  have 
gone  on  just  as  before.  It  seems  tolerably  certain, 
however,  that  if  the  opportunities  for  better  trans- 
portation were  provided,  more  materials  would  be 
sold,  and  as  the  most  profitable  prices  at  which  goods 
can  be  sold  is  somewhat  below  the  maximum,  prices 
would  tend  to  recede,  when  greater  freedom  of  move- 
ment is  secured. 

ECONOMY  IN   DESIGN 

A  third  feature  which  may  be  considered  here, 
is  the  importance  of  economy  in  design — that  is, 


HOW  CAN  MATERIALS  BE  MADE  AVAILABLE?      167 

making  material  go  farther  in  housing.  There  has 
been  in  the  past  a  good  deal  of  wasteful  designing 
which  employs  material  in  the  enclosure  of  space 
not  economically  utilized.  Skillful  planning  could 
accomplish  much  in  the  improvement  of  this  con- 
dition. 

As  to  the  labor  costs  in  the  production  of  building 
materials  there  is  no  question  that  they  have  risen 
considerably.  It  is  usually  the  lowest  grade  of  un- 
skilled labor  which  is  employed  in  this  class  of 
production,  and  the  general  labor  shortage  has 
caused  ingenious  people  to  devise  plans  whereby 
unskilled  labor  can  be  utilized  for  the  production 
of  articles  able  to  pay  higher  wages.  It  has  there- 
fore been  very  difficult  to  keep  up  the  supply  of 
labor  in  these  occupations. 


168  THE  HOUSING  FAMINE 


TOPIC   VI 
FIRST   ARGUMENT 

By  Edith  Elmer  Wood 

1.  I  favor  (1)  taxing  idle  land  into  use,  (2)  dodging 

labor  troubles  by  adopting  Labor's  housing 
programme,  (3)  procuring  materials  by  state  ac- 
tion if  necessary. 

2.  Mr.  Murphy  agrees  with  me  on  land,  has  little 

to  offer  on  labor,  and  is  mistaken  in  his  data 
on  materials. 

3.  Mr.  Ackerman  is  still  among  the  clouds. 

land:  by  taxation  and  city  ownership 
There  is,  of  course,  no  real  shortage  of  land.  Even 
such  congested  cities  as  Boston  and  New  York  have 
enough  land  within  their  borders  to  accommodate 
their  whole  population  in  two-story,  single-family 
houses  surrounded  by  gardens.  It  is  the  tremendous 
value  of  the  land  that  makes  such  use  impossible. 
The  problem  is  to  make  the  land  available — to  keep 
down  its  cost,  to  force  it  into,  u^e,  to  prevent  its 
being  cornered  by  speculators. 

The  measures  advocated  in  connection  with  taxa- 
tion and  congestion  are  the  ones  that  will  help  here. 
Taxing  idle  land  as  heavily  as  improved  land  acts 
as  a  strong  deterrent  to  the  man  who  holds  it  for 


HOW  CAN  MATERIALS  BE  MADE  AVAILABLE?     169 

a  rise  in  price.  The  ownership  of  land  by  the  city- 
offers  competition  which  is  death  to  exploitation. 
The  two  measures  together  form  a  very  strong  com- 
bination. The  development,  in  addition,  of  cheap 
transportation  to  new  outlying  districts  bought  by 
the  city  at  farm  prices,  would  offer  a  degree  of 
control  that  would  go  a  long  way  towards  solving 
the  land  problem. 

The  land  trouble  has  been  with  us  for  a  long  time. 
It  affects  different  communities  very  unevenly,  but, 
in  general,  under  the  laissez-faire  system,  seems  to 
be  the  price  paid  for  prosperity. 

Communities  of  the  future  may,  if  they  will,  avoid 
the  whole  trouble  and  secure  great  benefits  by  ex- 
ercising the  foresight  necessary  to  follow  the  simple 
common-sense  plan  of  the  Committee  on  New  Indus- 
trial Towns.1  Similar  results  are  obtained  by  the 
English  garden  city  and  co-partnership  methods. 

LABOR  AND  MATERIALS.      THE  WHOLE  INDUSTRIAL 
PROBLEM   INVOLVED 

The  present  shortage  of  labpr  and  of  building 
materials,  in  so  far  as  it  dates  from  the  war,  should,*1 
by  now,  have  disappeared.  The  government  em-c 
bargo  on  private  building  ended  long  ago.  The 
chaotic  condition  of  the labor  market,  in  the  build- 
ing  trades  and  in  those  trades  which  supply  building 
materials  persist  as  part  of  the  general  industrial, 
ferment — the  growing  pains  of  post-bellum  readjust- 
ment. 

We  must  trust  to  the  good  temper  and  basic  com- 


170  THE  HOUSING  FAMINE 

mon  sense  of  employers  and  wage  earners  to  arrive 
at  a  modus  vivendi.  The  sooner  employers  learn 
that  ante-bellum  wage  scales  will  never  be  restored, 
the  better  for  all  concerned.  The  sooner  they  learn 
that  what  labor  wants  is  not  simply  higher  wages, 
which  are  too  easily  nullified  by  rising  prices,  but  a 
share  of  the  profits  of  production,  the  sooner  they 
will  make  the  necessary  readjustment.  For  read- 
justment is  necessary.  On  the  other  hand,  clear- 
sighted labor  men  must  show  their  fellows  the  very 
definite  limits  that  exist  both  to  wages  and  to  labor's 
share  of  profits.  There  is  no  way  of  making  2+2 
equal  5.  "Where  costs  are  too  high,  the  public  ceases 
to  buy  the  product.  Where  too  large  a  share  of 
profit  is  claimed  by  labor,  no  one  will  take  the  risk 
of  investment  and  management. 

HOW  TO  SECURE  THE  CO-OPERATION 
OF  ORGANIZED  LABOR 

The  housing  policy  of  the  American  Federation 
of  Labor  offers  a  practical  argument  of  no  little 
force  in  favor  of  state  action,  which,  so  far  as 
we  know,  has  been  entirely  overlooked.  For  the 
simple  fact  is  that  the  adoption  of  a  state  action 
policy  would  probably  eliminate  the  labor  problem, 
which  is  one  of  the  biggest  obstacles  to  the  resump- 
tion of  private  building. 

Here  is  the  latest  statement  of  labor's  housing 
programme : 

"The  Government  should,  therefore,  inaugurate  a 
plan  to  build  model  homes  and  establish  a  system 


HOW  CAN  MATERIALS  BE  MADE  AVAILABLE?     171 

of  credits  whereby  the  workers  may  borrow  money 
at  a  low  rate  of  interest  and  under  favorable  terms 
to  build  their  own  homes.  Credit  should  also  be 
extended  to  voluntary  non-profit  making  housing 
and  joint  tenancy  associations.  States  and  munici- 
palities should  be  freed  from  the  restrictions  pre- 
venting their  undertaking  proper  housing  projects 
and  should  be  permitted  to  engage  in  other  neces- 
sary enterprises  relating  thereto."2 

Isn't  this  to  all  intents  and  purposes,  the  pro- 
gramme we  have  been  advocating?  Isn't  it  reason- 
able to  suppose  that  organized  labor  will  try  very 
hard  to  make  its  own  programme  a  success?  Aren't 
the  leaders  anxious  to  prove  its  practicability?  Isn't 
it  altogether  probable  that  a  municipal  housing 
scheme  would  be  put  through  with  entire  smoothness 
where  a  commercial  enterprise  would  encounter  con- 
tinuous rough  sledding? 

POSSIBLE    GOVERNMENT    ACTION    IN   REGARD   TO 
MATERIALS 

Did  insuperable  difficulties  in  the  way  of  obtaining 
materials  exist,  it  would  always  be  possible  to  push 
state  action  a  stage  farther  back  and  control  their 
production,  at  least  in  so  far  as  it  was  needful  in 
order  to  carry  out  state  enterprises.  "We  do  not 
believe,  however,  that  this  would  be  necessary.  Cer- 
tainly there  is  no  reason  at  present  for  doing  more 
than  holding  such  a  possibility  in  reserve. 

1  See  Publications  of  Committee  on  New  Industrial  Towns, 
Richard  S.  Childs,  Secretary,  381  Fourth  Ave.,  New  York. 

2  American  Federation  of  Labor  Reconstruction  Program,  p.  12. 


172  THE  HOUSING  FAMINE 


TOPIC   VI 
FIRST  ARGUMENT 

By  Frederick  L.  Ackerman 

1.  Curtailing  production — everybody  doing  it.    No- 

body to  blame.  Plenty  of  land,  labor  and 
materials  available.  Use  handicapped  by  finan- 
cial business  system.  Cannot  be  made  suffi- 
ciently available  until  system  of  co-operative 
efforts  succeeds  system  of  price  competition. 

2.  Mrs.  Wood  trusts — and  ignores  the  vital  problem 

of  production  and  distribution. 
S.  Mr.  Murphy  discovers  the  enemy  of  the  people. 
Provides  me  with  a  good  argument.    Fails  to 
offer  a  remedy. 

What  is  here  said  is  not  stated  with  a  view  of 
attaching  blame  to  any  one  or  to  any  group  of 
persons.  The  acts  referred  to  are  one  and  all  in 
the  nature  of  perfectly  natural  and  to-be-expected 
reactions  to  our  surrounding  economic  conditions — 
entirely  legitimate — a  necessary  part  of  our  scheme 
of  "doing  things.' '  Under  the  workings  of  the 
modern  industrial  system,  land,  labor,  and  mate- 
rials serve  as  the  material  means  by  which  we  carry 


HOW  CAN  MATERIALS  BE  MADE  AVAILABLE?      173 

on  business  for  a  profit  in  terms  of  price.  Carry-, 
ing  on  business  under  conditions  of  price  com- 
petition is  very  largely  a  matter  of  controlling  out- 
put— exercising  a  perfectly  legitimate  sabotage  over 
the  processes  of  production.  This  well  known  fact 
is  here  recalled  with  a  view  of  stating  that — how  to 
do  away  with  this  systematic  sabotage  of  produc- 
tion— is  what  underlies  the  problem  of  making  land, 
labor  and  materials  sufficiently  available  for  housing 
needs.  Expanding  this  question,  the  problem  may 
be  restated  as  follows: 

(a)  How  may  we  prevent  land  from  being  held 
out  of  the  market  in  order  to  secure  a  higher 
price  ? 

(6)  How  may  we  free  the  processes  (technological) 
of  production  from  the  control  of  a  system 
of  price  competition,  that  is  to  say,  how 
may  we  organize  production  so  that  the 
purpose  shall  be  the  production  of  a  suffi- 
cient supply  of  needed  goods  instead  of 
merely  enough  goods  to  keep  the  price  up? 

(c)  How  may  we  free  labor  from  trade  union 
restrictions  which  look  toward  a  curtail- 
ment of  production  for  the  same  reasons  as 
noted  in  the  cases  above? 

PLENTY   OF  LAND,   LABOR  AND  MATERIALS 

This  looks  like  a  large  order.  It  is;  the  question 
constitutes  the  entire  problem.  There  is  plenty  of 
land  available.    Nearly  every  one  knows,  and  th§ 


174  THE  HOUSING  FAMINE 

experience  of  the  war  both  here  and  in  Europe  demon- 
strates conclusively  that,  if  our  technological  knowl- 
edge could  be  applied  to  the  operation  of  existing 
plants  and  equipment  we  could  produce  all  that  we 
need  of  everything.  Nearly  every  one  knows  that 
there  is  plenty  of  labor  power  available — if  it  could 
be  used  and  brought  to  bear  directly  upon  the  pro- 
duction of  useful  commodities.  These  conditions  are 
sufficiently  notorious  to  warrant  no  further  talk 
about  it. 


USE   OF  THESE  HANDICAPPED   BY   SYSTEM 

Our  highly  rated  system  of  production  is  really 
a  system  of  cross  purposes  of  self-imposed  restric- 
tions upon  output — of  highly  organized  and  blame- 
less sabotage.  In  the  face  of  a  full  knowledge  of 
these  conditions,  we  hope  against  hope  that  some- 
how, out  of  a  readjustment  of  loan  credit  arrange- 
ments and  various  means  of  make-believe  production, 
we  may  come  by  an  adequate  supply  of  happy  homes 
in  wholesome  surroundings.  To  hope  for  such  a 
result  under  the  triple  handicap  imposed  upon  the 
processes  (technological)  of  production  is  very  much 
like  hoping  that  a  one-legged  blind  man  dragging 
a  ball  and  chain  might  win  a  hurdle  race. 

The  long  accumulated  house  shortage — the  present 
housing  famine — is  but  one  of  the  symptoms  that 
the  present  economic  industrial  system  is  by  degrees 
breaking  down.  This  is  plain  to  all  but  the  willfully 
blind.     But  it  is  not  generally  admitted  that  the 


HOW  CAN  MATERIALS  BE  MADE  AVAILABLE?     175 

cause  of  this  condition  lies  in  the  very  nature  of  the 
system  itself.  Must  we  go  on  with  the  dance  until 
the  system  of  investment  for  profit  and  price  competi- 
tion shall  have  spent  itself? 

SOME   CHANGES   SUGGESTED 

The  gist  of  what  is  here  offered  on  this  head, 
when  formulated  in  terms  of  the  present  economic 
industrial  system,  may  be  stated  as  follows : 

1.  To    make    land   sufficiently   available,    disallow 

speculation  in  land. 

2.  To  make  materials  sufficiently  available,  trans- 

fer the  control  over  the  industrial  processes 
from  the  field  of  finance  to  that  of  technology. 
This  may  be  accomplished  by  a  disallowance 
of  the  capitalization  of  prospective  earnings 
and  the  disallowance  of  investment  for  profit, 

3.  Labor  will  be  made  sufficiently  available  as  a 

consequence  of  accomplishing  the  above;  that 
is  to  say,  labor  could  not  then  be  employed  iu 
the  production  of  useless  commodities  nor  in 
the  production  of  waste  nor  in  canceling  its 
own  effort  toward  the  production  of  vitally 
needed  goods. 


176  THE  HOUSING  FAMINE 


TOPIC    VI 

SECOND   ARGUMENT 

By  John  J.  Murphy 

MB.   ACKEEMAN   CONJURES  A  VISION 

On  this  topic  Mr.  Ackerman  gives  us  the  first 
glimpse  of  his  philosophy,  and  very  interesting  it  is, 
but  he  still  leaves  us  in  doubt  as  to  the  way  in 
which  to  get  it.  We  have  his  water-color  sketch 
of  the  social  structure  that  is  to  be,  but  where  are 
his  plan  and  specifications?  Between  us  and  the 
civilization  which  he  paints  stretches  a  chasm  as 
broad  as  the  Amazon,  and  there  is  no  sign  of  a 
bridge,  a  tunnel  or  even  a  ferry  boat.  It  is  quite 
true  that  specialization  in  industry,  which  promises 
to  elevate  man  by  leaving  him  time  enough  to 
cultivate  his  higher  powers  is  turning  him  into  an 
automaton,  which  is  spending  all  its  energy  in  pro- 
ducing things  that  it  does  not  want  to  exchange  for 
the  products  of  other  automata  making  things  they 
do  not  want.    Some  of  his  questions  I  can  answer : 

TAX  LAND   VALUES 

(a)  We  can  prevent  land  from  being  held  out 
of  the  market  for  a  higher  price  by  carrying  a  little 


HOW  CAN  MATERIALS  BE  MADE  AVAILABLE?     177 

further  the  policy  already  pursued  by  so  many  of 
our  large  cities  of  absorbing  land  rent  in  taxation. 
No  one  will  hold  land  for  a  rise  if  he  knows  that 
he  will  not  be  permitted  to  appropriate  the  increment. 

CAN   MONOPOLY   BE   BROKEN 

(b)  This  question  can  be  simplified  into  the  fol- 
lowing: How  can  the  grip  of  monopoly  on  production 
be  broken?  If  the  sources  of  supply  of  all  needful 
things,  which  are  now  obviously  controlled  to  an 
extent  of  which  few  are  aware,  were  compelled  to 
pay  annually  to  the  states  and  the  nation  the  full 
value  of  the  special  privileges  they  enjoy,  their 
power  would  soon  be  controlled,  and  they  would 
either  disappear  or  become  the  useful  servants  of 
the  community.  Of  course,  the  space  does  not  permit 
the  development  of  this  argument,  but  I  firmly  be- 
lieve the  taxing  power  of  the  government  can  accom- 
plish the  needed  reforms  without  revolution  and  in 
orderly  fashion. 

MODERN   SUPER-MONSTERS 

(c)  The  laborer  will  be  freed  from  labor  union 
restriction  when  society  puts  him  in  a  position  where 
he  can  earn  his  livelihood  without  having  to  submit 
to  the  caprices  of  an  employer.  The  position  in  that 
respect  is  growing  better  than  it  was,  but  a  great 
many  people  do  not  like  it.  The  workman  obeys 
the  labor  union  because  it  is  the  only  protection 
that  he  knows  from  the  power  of  the  employer,  but 


178  THE  HOUSING  FAMINE 

he  would  rather  be  free.  But  he  can  no  more  be  free, 
while  the  gigantic  monsters,  which  we  have  legally- 
created,  walk  the  earth,  than  could  his  cave-abiding 
forebears  be  in  the  days  of  the  megatherium  and 
the  brontosaurus.  Nature  was  good  enough  to  re- 
move these  excrescenses  from  the  earth  before  our 
day,  but  we  have  tried  our  hand  at  replacing  them 
and  we  have  measurably  succeeded. 

"  IT  TOUCHES  NOTHING   WHICH   IT  DOES  NOT 
DEFORM  " 

I  have  little  criticism  to  offer  of  Mrs.  "Wood's 
contribution  on  this  subject,  except  that  she  insists 
on  injecting  Government  interference  in  at  the  end 
of  her  suggestions.  Government  in  the  form  of  the 
judge,  the  policeman,  the  tax-collector  and  possibly 
the  soldier  we  must  have,  but  of  its  performance  in 
other  fields  the  best  summary  and  characterization 
is,  "It  touches  nothing  that  it  does  not  deform/ 9 


HOW  CAN  MATERIALS  BE  MADE  AVAILABLE?     179 


TOPIC   VI 
SECOND   ARGUMENT 

By  Edith  Elmer  Wood 

where  we  agree 

Taking  up  land  first,  I  notice  that  Mr.  Murphy 
agrees  with  me  in  advising  that  it  be  taxed  in  such 
a  manner  that  the  owner  "  would  not  be  able  to 
capitalize  the  so-called  unearned  increment.' ' 

As  for  labor,  he  has  the  same  old  remedy  that  I 
offered  myself — good  sense  and  mutual  concessions. 
It  is  perfectly  good  advice,  if  any  one  would  only 
take  it! 

THE  FACTS  ARE  BAD  ENOUGH 

Coming  to  materials,  I  must  question  his  figures 
when  he  says  they  are  four  or  five  times  what  they 
were  in  the  pre-war  period.  He  can  doubtless  point 
to  some  particular  commodity,  like  plate  glass  or 
linseed  oil,  which  has  sky-rocketed  to  that  extent, 
but  in  general  100  per  cent  would  cover  the  increase, 
and  in  many  places  it  is  less.  The  Monthly  Labor 
Review  issued  by  the  U.  S.  Bureau  of  Labor  Sta- 
tistics, in  the  February,  1920,  number,  contains  a 


180  THE  HOUSING  FAMINE 

comparison  of  the  cost  of  a  typical  6-room  American 
home  worked  out  for  1913  and  for  July,  1919.  There 
is  a  labor  increase  of  65  per  cent  and  an  increase 
in  cost  of  materials  of  71  per  cent.  There  has  prob- 
ably been  a  greater  rise  since  July,  1919,  than  from 
1913  to  1914,  but  not  enough  to  carry  us  within 
speaking  distance  of  the  Commissioner's  figures.3 

CONSISTENT  INDIVIDUALISM   IMPOSSIBLE 

I  have  no  quarrel  with  Mr.  Murphy's  plan  for 
compelling  the  railroads  to  give  priority  to  building 
materials  over  everything  except  food  and  coal.  It 
might  be  a  good  idea  for  speeding  construction 
during  the  present  emergency.  But  it  seems  curious 
for  an  individualist — an  advocate  of  laissez-faire — 
to  seek  his  remedies  in  additional  government  inter- 
ference. As  fast  as  he  lifts  one  brake  he  applies 
another.  It  only  goes  to  show  how  impossible  it 
is  to  run  our  present-day  world  on  consistently  in- 
dividualistic principles. 

THREE  EXCELLENT  QUESTIONS 

If  Mr.  Ackerman  were  as  good  at  answering  ques- 
tions as  he  is  at  asking  them,  he  would  be  entitled 
to  high  rank  among  the  benefactors  of  the  human 
race.    Here  are  his  questions: 

1.  How  may  we  prevent  land  from  being  held  out 
of  the  market  in  order  to  secure  a  higher 
price? 


HOW  CAN  MATERIALS  BE  MADE  AVAILABLE?      181 

2.  How  may  we  organize  production  so  that  the 

purpose  shall  be  the  production  of  a  suffi- 
cient supply  of  needed  goods  instead  of 
merely  enough  goods  to  keep  the  prices  up? 

3.  How  may  we  free  labor  from  trade  union  re- 

strictions which  look  toward  a  curtailment 
of  production? 

ANSWERS  FAIL  TO  ILLUMINATE 

The  answers  are  somewhat  disappointing.  They 
are: 

1.  Disallow  speculation  in  land. 

2.  Transfer  the  control  over  the  industrial  proc- 

esses from  the  field  of  finance  to  that  of 
technology. 

3.  Will  follow  in  consequence  of  2. 

I  suspect  that  by  disallowing  speculation  in  land, 
Mr.  Ackerman  means  much  the  same  as  Mr.  Murphy 
and  I  do,  by  our  somewhat  more  definite  language. 
As  for  the  rest,  it  is  obviously  the  new  industrial 
system  in  a  different  verbal  dress.  And  the  rather 
important  question  of  how  it  is  to  be  brought  about 
is  still  completely  ignored. 

1  See  also  Arthur  Gleason  writing  in  The  Nation.  April  17, 1920. 


182  THE  HOUSING  FAMINE 


TOPIC   VI 
SECOND   ARGUMENT 

By  Frederick  L.  Ackerman 

WHY   AUGMENT   CONGESTION? 

Here  is  plenty  of  grist  to  grind.  Looks  like  the 
entire  problem. 

Land — plenty  of  it — admitted.  Eemedies — Mrs. 
Wood:  taxing  idle  land — municipal  ownership  of 
outlying  districts — cheap  transportation.  Mr.  Mur- 
phy: a  policy  of  taxing  valuable  land.  Both  sug- 
gestions are  formulated  around  the  idea  of  con- 
stantly expanding  cities;  their  argument  on  this 
head  run  in  the  direction  of  the  sweep  of  population 
into  urban  centers.  Why  augment  this  drift?  Mrs. 
Wood  says  that  making  labor  and  materials  avail- 
able constitute  "the  whole  industrial  problem.,, 
Right-O.  "Chaotic  conditions  .  .  .  growing  pains  of 
post-bellum  read justments. ' '  I  do  not  so  view  it. 
Looks  as  if  system  of  make-believe  production  was 
beginning  to  crack. 

MRS.    WOOD   PINS   HER   FAITH 

In  reference  to  the  relation  between  employers 
and  wage  earners,  Mrs.  Wood's  use  of  "we  must 


HOW  CAN  MATERIALS  BE  MADE  AVAILABLE?      183 

trust,  etc.,"  suggests  the  opening  address  of  an  in- 
dustrial conference  in  which  all  grounds  for  a  dif- 
ference of  opinion  had  been  carefully  eliminated  in 
advance  of  the  discussions. 

The  facts  of  the  case,  as  regards  industrial  rela- 
tions, are  not  such  as  to  warrant  this  summary  and 
optimistic  dismissal  of  this  matter.  Events  are  not 
moving  in  that  direction;  nor  are  there  signs  of 
such  a  movement.  Disposing  of  the  labor  problem 
by  state  action  in  housing  would  certainly  be  an 
easy  way  of  disposing  of  it.  I  suspect  that  there 
are  conditions  which  make  for  industrial  unrest 
which  would  still  hang  'round  and  annoy  us. 

MR.   MURPHY   BAFFLES  ME 

I  am  baffled.  Mr.  Murphy  says:  "The  real  enemy 
of  the  true  capitalist  and  the  true  laborer  is  the  man, 
who  is  legally  privileged  to  extract  from  the  products 
of  both  the  product  of  their  joint  labor  without  giv- 
iny  any  return.' ' 

THE  NEW  WHO'S  WHO 

I  ask:  Who  is  the  (<true  capitalist" — who  is  the 
"true  laborer"?  Why  is  any  one  "legally  privileged 
to  extract  .  .  .  without  giving  any  return"?  I  have 
an  idea :  I  think  that  Mr.  Murphy  has  put  his  finger 
on  something — a  sore  spot — a  very  sore  spot;  and 
the  spot  is  a  very  large  spot.  It  covers  the  whole 
body  of  the  financial-business — industrial  system  so 
to  speak.    I  suspect  that  he  has  said  what  I  have 


184  THE  HOUSING  FAMINE 

been  trying  to  say.  So  I  ask  a  question  or  two; 
who  is  this  real  enemy?  what  does  he  look  like? 
And  in  this  connection,  what  is  investment  for  a 
profit  and  the  capitalization  of  prospective  income 
if  it  is  not  a  legal  way  of  getting  something  for 
nothing? 

Mr.  Murphy  would  provide  a  sufficient  quantity 
of  material  for  the  building  of  homes  by  differential 
freight  rates  upon  materials  for  certain  buildings, 
food  and  coal.  Mr.  Murphy,  are  you  not  interfering, 
tampering  with  the  laws  of  supply  and  demand? 
Beware ! 

I   RETURN  TO   MY   ONE-FINGER   EXERCISE 

But  again  I  return  to  my  one-finger  exercise.  Why 
should  our  present  financial  industrial  system  be 
maintained  without  change?  We  know  that  it  can 
only  operate  when  it  keeps  prices  up  through  holding 
production  down.  What  chance  is  there  of  making 
labor  and  materials  available  by  schemes  of  taxation, 
transportation,  etc.,  etc.,  when  the  whole  financial 
business  system  can  only  be  rated  successful  (in 
terms  of  price,  which  is  the  only  way  business  rates 
business)  when  it  so  operates  as  to  produce  less  than 
the  actual  needs? 


HOW  CAN  MATERIALS  BE  MADE  AVAILABLE?     185 


TOPIC  VI 
THIRD  ARGUMENT 

By  John  J.  Murphy 

GOVERNMENT   SHOULD   REPAIR  THE   DAMAGE   CAUSED 
BY  ITS   OWN   ACTION 

There  is  apparent  agreement  among  us  on  the  sub- 
ject of  land  and  labor. 

I  can  point  to  many  important  materials  which 
have  advanced  as  much  as  I  said  in  my  original 
statement.  As  important  an  article  as  brick,  which 
sold  before  the  war  for  $6.00  per  thousand,  alongside 
the  dock,  is  now  up  to  $30  per  thousand.  Mrs.  Wood 
reproaches  me  with  inconsistencies,  because  I  demand 
that  Government,  upon  which  she  leans  so  heavily  to 
remedy  all  our  ills,  shall  repair  some  of  the  derange- 
ment which  it  created  before  and  during  the  war. 

NO  INCONSISTENCIES  IN  URGING  GOVERNMENT  OWNER- 
SHIP OF  RAILROADS  AS  A  PART  OF  AN  INDIVIDUALIST 
PROGRAMME 

There  is  no  inconsistency  in  an  individualist  favor- 
ing railroad  regulation,  nationalization  or  operation. 
All  that  he  demands  is  that  the  Government  shall 


186  THE  HOUSING  FAMINE 

perform  public  functions  and  not  demoralize  private 
activities  by  unskillful  and  often  harmful  inter- 
ference. As  both  Mrs.  Wood  and  Mr.  Ackerman 
stress  this  question,  I  may  say  that,  assuming  a  situa- 
tion in  which  transportation  facilities  have  not  kept 
up  with  public  need,  it  is  entirely  justifiable  to  adjust 
existing  facilities  to  the  most  pressing  public  needs. 
One  can  never  "tamper  with  the  law  of  supply  and 
demand.' '  It  can  be  obstructed,  but  always  with 
grave  danger  to  the  society  that  undertakes  it. 


HOW  CAN  MATERIALS  BE  MADE  AVAILABLE?     187 


TOPIC  VI 
THIRD   ARGUMENT 

By  Edith  Elmer  Wood 

is  goveknment  only  a  necessary  evil? 

Mr.  Murphy  has  very  clearly  formulated  the  in- 
dividualist's distrust  of  Government  in  his  closing 
sentence :  "Government  in  the  form  of  the  judge,  the 
policeman,  the  tax  collector  and  possibly  the  soldier, 
we  must  have,  but  of  its  performance  in  other  fields, 
the  best  summary  and  characterization  is :  'It  touches 
nothing  that  it  does  not  deform. '  ' '  Yet  when  talking 
of  municipal  ownership,  he  said  water,  light  and 
transportation  came  within  its  proper  field,  though 
they  are  clearly  quite  beyond  the  province  of  the 
policeman  and  the  tax  collector.  And  he  wants  the 
government  to  compel  national  banks  to  make  long- 
time housing  loans.  And  what  will  he  say  of  the 
public  schools,  which  some  of  us  regard  as  one  of  our 
best  American  achievements?  Are  our  children  "de- 
formed by  their  touch  V 

I  don't  blame  him  in  the  least  for  not  being  con- 
sistent. As  I  have  said  on  various  occasions,  the  only 
really  consistent  individualist  is  the  philosophic  an- 


188  THE  HOUSING  FAMINE 

archist  who  says  all  government  is  evil,  and  sticks 
to  it. 

THE   HOUSING   PROBLEM   IS   ALL   I   CONTRACTED 
TO   SOLVE   THIS  TRIP 

I  agree  with  Mr.  Ackerman  in  having  no  very- 
high  opinion  of  my  bromidic  suggestion  of  mutual 
concessions  to  solve  the  labor  problem.  I  don't 
think  I  could  rightfully  be  called  upon  to  solve  any- 
thing so  large,  in  a  hundred  words  or  so,  incidental 
to  discussing  housing. 

I  suggested  that  union  labor's  interest  in  the  suc- 
cess of  municipal  housing  might  help  us  to  get  houses 
in  that  way  more  quickly  than  in  another.  Mr. 
Ackerman  surely  did  not  think  I  meant  to  offer  it  as 
an  adequate  cure  for  labor  unrest  in  general? 


HOW  CAN  MATERIALS  BE  MADE  AVAILABLE?     189 


TOPIC  VI 

* 

THIRD  ARGUMENT 

By  Frederick  L.  Ackerman 

MR.   MURPHY   EXPLAINS   OUR  ACTIONS:     MRS.   WOOD 
WANTS   SPECIFICATIONS 

Mr.  Murphy's  second  argument  discloses  that  we 
are  of  a  similar  opinion  with  regard  to  how  the  mod- 
ern financial  industrial  system  makes  us  all  act; 
apparently  neither  of  us  views  our  actions  as  of  very 
much  benefit  to  any  one.  I  refer  here  particularly  to 
his  statement  about  the  M automaton.' ' 

What  to  do  about  it  is  the  question.  Mr.  Murphy 
proposes  to  absorb  land  rent  and  break  monopoly  by 
taxation.  I  can  not  harness  up  these  two  suggestions 
with  his  repeated  demands  for  non-interference  by 
Government,  nor  for  his  plea  for  free  competition  in 
terms  of  price  and  his  readiness  to  fall  back  upon  the 
"law  of  supply  and  demand." 

THE   SAME   OLD   CONFUSION 

I  suspect  that  Mr.  Murphy  is  seeking  to  give  utter- 
ance to  that  confused  point  of  view  which  finds 
expression  in  our  attempt  to  regulate  railroads,  etc. 
We  hold  so  fast  to  our  concept  of  property  rights 


190  THE  HOUSING  FAMINE 

that  we  render  nugatory  our  attempts  at  control  and 
regulation.    There  is  no  middle  ground. 

The  economic  necessities  of  the  present  require  a 
revision  of  the  institutions  of  rights  and  privilege. 
This  involves  a  change  in  the  law  with  respect  to 
what  constitutes  property  rights.  Of  course  whether 
or  not  we  shall  come  to  view  this  matter  in  this  light 
remains  to  be  seen.  Eefusing  to  so  view  the  matter 
will  not  make  that  which  now  seems  necessary  appear 
any  the  less  so.  i 

TIME   NOT   RIPE   FOR   COMPLETE   SPECIFICATIONS 

Mrs.  Wood  insists  upon  complete  specifications  for 
my  industrial  system;  space  does  not  permit.  What 
£  have  in  mind  may  be  glimpsed  by  a  study  of  the 
Building  Trades  Parliament  in  England.  Not  that 
the  plans  developed  by  this  Parliament  strike  at  the 
root  of  the  whole  matter ;  but  in  aiming  at  the  elim- 
ination of  the  system  of  price  competition  and  its 
consequent  waste;  and  also  in  aiming  to  use  labor 
continuously  it  may  be  said  to  move  in  the  right 
direction ;  it  is  certainly  worth  studying. 

Mrs.  Wood  continues  to  ignore  the  world  of  in- 
dustry. Her  argument  therefore  passes  around  the 
mass  of  the  problem;  what  she  proposes  could  have 
little  or  no  bearing  upon  the  situation. 

All  that  I  have  attempted  to  demonstrate  is  that 
the  housing  problem  is  primarily  a  problem  of  pro- 
duction, and  that  its  solution  is  not  to  be  found 
through  resort  to  some  more  loan  credit  manipula- 
tion. 


TOPIC  VII 
WHAT  ARE  THE  FIRST  STEPS? 


TOPIC  VII 
FIRST  ARGUMENT 

By  John  J.  Murphy 

1.  I  favor  the  removal  of  all  the  obstacles  which 

Government  places  in  the  way  of  house  building. 
This  can  be  done  at  once.  All  the  other  pro- 
posals involve  years  of  delay. 

2.  Mrs.  Wood  would  increase  the  number  of  commis- 

sions, boards,  officials,  etc.,  whose  recommenda- 
tions and  reports  merely  obfuscate  the  public 
mind. 

3.  Mr.  Ackerman's  final  word  is,  in  substance,  if  you 

want  a  house,  go  and  build  one.  This  seems  the 
only  intelligible  interpretation  of  building  "for 
use  and  not  for  profit.' ' 


If  a  motor  car  is  laboring  up  a  steep  hill  with  a 
heavy  load,  and  if  the  chauffeur  should  discover  that 
he  had  forgotten  to  take  off  the  brakes  which  he  had 
applied  previously  while  running  down  the  steep 
slope,  his  first  action  would  naturally  be  to  remove 

193 


194  THE  HOUSING  FAMINE 

the  obstacle  to  his  further  progress.  This  illustration 
fairly  typifies  our  social  situation  at  the  present  time. 
At  every  point  where  Government  touches  housing, 
it  operates  to  discourage  and  repress  it.  Some  re- 
strictions in  the  form  of  requirements  for  light,  ven- 
tilation, sanitation,  are  of  course,  necessary,  and 
should  not  be  diminished,  even  in  the  present  crisis. 


M  GET  OUT  OF  MY  LIGHT  " 

The  old  Greek  story  of  Diogenes  and  Alexander 
is  applicable  here.  Alexander  hearing  of  Diogenes, 
sent  for  him.  The  philosopher  ignored  the  con- 
queror's invitation.  Curious  to  see  the  man  who 
dared  ignore  him,  Alexander  went  to  see  him,  and 
found  him  occupying  his  well-known  tub.  To  the 
philosopher,  still  maintaining  an  attitude  of  complete 
indifference,  Alexander  said:  "Is  there  anything  I 
can  do  for  you?"  "Yes,"  said  Diogenes,  "you  can 
step  aside,  so  the  sun  will  shine  on  me." 

HOW   GOVERNMENT   OBSTRUCTS 

Alexander  is  the  government,  and  Diogenes  is  the 
public.  Therefore,  when  we  come  to  consider  what 
are  the  first  steps  to  be  taken  by  the  community  in 
general,  we  must  turn  to  Government,  not  for  aid, 
but  to  demand  that  it  get  out  of  our  way.  The 
Federal  Government  raises  building  costs  by  keeping 
out  foreign  material,  the  competition  of  which,  in 
normal  times,  would  tend  to  reduce  cost.    By  im- 


WHAT  ARE  THE  FIRST  STEPS?  195 

posing  taxes  upon  incomes  derived  from  mortgages, 
it  reduces  the  amount  of  capital  likely  to  be  invested 
in  mortgages  on  buildings,  which  in  turn,  tends  to 
repress  the  production  of  buildings.  The  State  does 
its  share  in  repression  by  collecting  an  income  tax, 
which  bears  on  incomes  derived  from  mortgages,  and 
by  the  small  tax  which  it  imposes  on  real  estate, 
which  includes  buildings.  But  it  is  when  we  go  to 
the  city  that  we  find  the  real  lion  in  the  path. 

REAL   ESTATE  TAXATION 

Cities  raise  the  great  mass  of  their  revenues  by 
taxation  upon  real  estate.  A  great  many  of  them 
assess  property  from  eighty-five  to  one  hundred  per 
cent  of  its  value,  and  in  general,  the  larger  the  city 
the  higher  the  percentage  of  assessment.  In  New 
York  a  sum  equal  to  twenty-five  per  cent  of  the 
gross  revenue  from  buildings  is  taken  in  taxation. 
These  revenues  could  be  raised  in  other  ways,  which 
would  not  militate  against  building  construction, 
and  whether  we  are  prepared  to  adopt  such  a  policy 
as  a  permanent  feature  of  our  political  system  or 
not,  taxes  on  new  buildings  should  be  repealed  to 
meet  the  present  emergency.  If  Government  re- 
mitted for  a  period  of  ten  years  all  the  taxes  which 
now  bear  directly  or  indirectly  upon  dwellings,  in- 
vestment in  that  form  of  property  would  become 
highly  desirable,  instead  of  extremely  dubious,  as  it 
is  at  the  present  time. 


196  THE  HOUSING  FAMINE 

COMPETITION   FOR   CAPITAL 

Capital  is  now  being  sought  for  many  enterprises 
that  can  give  excellent  security  and  large  dividends. 
It  will  not  be  drawn  into  housing,  unless  at  least,  as 
good  inducements  are  offered. 

Additional  support  is  lent  to  this  policy  by  the 
fact  that  in  several  states,  in  order  to  meet  the  emer- 
gency, rents  are  being  restricted.  The  inevitable 
result  of  such  restriction  will  of  course  be  to  dis- 
courage investment  in  building.  Therefore,  addi- 
tional inducement  must  be  offered.  I  lay  stress  upon 
this  point  to  the  exclusion  of  all  others,  because  I 
have,  for  a  couple  of  years,  been  in  contact  with  the 
various  proposals  made  to  grapple  with  the  emer- 
gency— appeals  to  wealthy  philanthropists,  to  great 
business  organizations  to  provide  homes  for  their 
workmen,  and  such  devices,  and  I  can  say  with  cer- 
tainty that  none  of  them  has  begun  to  solve  the 
problem.  So  far  as  they  go  they  help,  but  to  such  a 
small  extent  as  to  leave  the  main  situation  un- 
affected. 

BUILDING  SHOULD  BE  MADE  A  PREFERRED 
INVESTMENT 

If  we  want  adequate  housing,  we  can  only  get  it 
by  offering  such  inducements  as  will  make  it  a  pre- 
ferred investment,  and  we  can  only  do  that  in  one  of 
two  ways,  by  increasing  rentals  beyond  the  point 
which  will  be  within  the  reach  of  the  average  citizen, 


WHAT  ARE  THE  FIRST  STEPS?  197 

or  by  remitting  the  penalties  which  we  now  impose 
in  the  form  of  taxes  on  those  who  have  temerity 
enough  to  build  dwellings  for  occupancy  by  others. 

SIMPLICITY  THE  KEYSTONE   OF  EFFICIENCY 

Perhaps  some  will  underestimate  the  importance  of 
a  proposal  which  is  limited  to  a  single  policy  when 
many  and  complex  solutions  are  proposed.  "When 
David  met  Goliath,  a  single  stone  properly  directed 
accomplished  what  more  elaborate  machinery  might 
have  failed  to  achieve.  In  Aesop's  Fables  there  is 
told  the  story  of  the  cat  and  the  fox,  comparing  ex- 
periences as  to  the  best  way  of  escaping  the  hounds. 
The  fox  had  many  ingenuous  stratagems  by  which 
he  bluffed  his  pursuers ;  so  far  he  had  always  escaped, 
but  the  future  was  not  certain.  The  cat  was  only 
mildly  interested.  "True,"  said  she,  "I  too  have 
often  been  chased,  but  I  always  run  up  a  tree,  and 
then  there's  nothing  to  it"  Simplicity  is  the  key- 
atone  of  efficiency. 


198  THE  HOUSING  FAMINE 


TOPIC  VII 
FIRST  ARGUMENT 

By  Edith  Elmer  Wood 

lo  I  offer  as  an  immediate  programme  (1)  the  crea- 
tion of  national,  state  and  local  housing  com- 
missions, (2)  amendment  of  state  constitutions 
or  passage  of  enabling  acts  to  permit  municipal 
housing,  (3)  Postal  Savings  loans  and  others. 

2.  Mr.  Murphy's  measures  will  produce  only  ex- 

pensive houses. 

3.  Mr.  Ackerman  advocates  only  the  adoption  of  a 

theory. 

NATIONAL,    STATE   AND  LOCAL  HOUSING  BOARDS 

Perhaps  the  wisest  first  step  in  every  state  would 
be  what  has  been  recommended  by  the  Governor  of 
New  York  in  a  message  to  the  legislature, — the  es- 
tablishment of  state  and  local  housing  boards  to 
serve  as  the  machinery  of  administration,  and  at  the 
same  time  the  means  of  public  education.1  It  would  be 
well  to  make  them  housing  and  town  planning  boards. 
The  success  of  a  housing  programme  depends  (1)  on 
its  own  merits,  (2)  on  the  merits  of  those  charged 


WHAT  ARE  THE  FIRST  STEPS?  199 

with  carrying  it  out,  and  (3)  on  the  wide-spread  and 
intelligent  public  opinion  that  supports  it. 

The  Belgian  housing  law  of  1889  provides  for 
local  housing  boards,  comites  de  patronage,  reporting 
annually  to  a  national  commission.  The  unpaid  mem- 
bers of  these  boards,  reporting  on  local  housing 
needs,  watching  over  the  enforcement  of  the  sanitary 
laws,  helping  workmen  to  get  housing  loans  and  tax 
exemptions,  disseminating  housing  information,  have 
rendered  an  invaluable  public  service.  France  and 
Italy  have  adopted  the  system  and  Great  Britain  has 
adapted  it. 

"Within  our  states,  there  is  no  reason  why  state  and 
local  housing  boards  should  not  bear  to  each  other 
the  same  relation  as  state  and  local  boards  of  health. 

Nationally,  the  best  thing  we  can  do,  probably,  is 
to  pass  the  Tinkham  bill  (H.  R.  7014)  to  create  a 
Housing  Bureau  in  the  Department  of  Labor.  Its 
only  function  is  to  be  a  center  of  information,  but 
even  so,  it  will  be  of  great  value.  There  is  also  a 
bill  introduced  by  Senator  Kenyon,  to  establish  a 
temporary  commission  to  report  on  the  best  methods 
of  providing  credit  for  housing.  This  also  is  a  stage 
which  it  is  probably  necessary  to  pass  through. 

CONSTITUTIONAL  AMENDMENTS  AND   ENABLING  ACTS 

The  foregoing  measures  are  purely  preliminary. 
And  there  are  other  preliminaries  equally  essential. 
In  many  states  constitutional  amendments  will  be 
necessary  before  we  can  have  municipal  housing.    In 


200  THE  HOUSING  FAMINE 

others,  enabling  acts  will  be  sufficient.  The  ball,  in 
either  case,  should  be  set  rolling.  In  some  states 
constitutional  amendments  will  be  necessary  for  the 
use  of  state  credit. 


POSTAL   SAVINGS   LOANS 

The  use  of  federal  credit,  fortunately,  requires  no 
constitutional  amendment. 

One  source  of  credit  has  such  extraordinary  ad- 
vantages that  it  stands  out  quite  clearly  as  the  first 
to  be  tapped.  As  far  back  as  1913  a  measure  was 
before  Congress  providing  for  housing  loans  from 
Postal  Savings  deposits.  It  should  be  revived  and 
pushed  through.  This  fund  represents  the  savings  of 
working  men  and  women  and  should  be  used  for 
their  benefit  instead  of  for  that  of  the  banks  which 
now  profit  from  their  low  interest  rates.  The  govern- 
ment only  pays  the  depositors  2  per  cent  interest.  It 
could  perfectly  well  lend  part  of  the  money  to  work- 
ingmen  at  3  per  cent  for  housing  purposes  and  pay 
all  expenses  of  administration  with  the  difference. 
This  is  a  much  lower  interest  rate  than  could  be  pro- 
vided in  any  other  way  at  the  present  time.2 

It  is  to  be  regretted  that  the  fund  in  question  is 
no  larger— $167,323,260  by  the  last  report,  June  30, 
1919.  Ten  per  cent  of  this— less  than  $17,000,000— 
would  not  go  very  far  in  these  days.  Still,  it  would 
be  worth  while  to  open  up  home  ownership  even  to 
5,000  or  6,000  families.  And  quite  likely  it  would 
be  found  safe  to  lend  more  than  ten  per  cent. 


WHAT  ARE  THE  FIRST  STEPS?  201 

AMENDMENT   OF   THE  FEDERAL  FARM   LOAN   ACT. 
NATIONAL  AND  STATE   HOUSING   FUNDS  • 

If  the  Federal  Farm  Loan  Act  were  amended  to 
include  housing  loans,  a  considerable  amount  of  cap- 
ital might  be  attracted  at  a  5  per  cent  rate.  A  fed- 
eral housing  fund,  procured  by  bond  issue  at  the 
present  time  could  hardly  charge  less.  It  might  pos- 
sibly be  floated  at  4%.  State  housing  funds  pro- 
cured by  bond  issue  would  undoubtedly  have  to 
charge  a  higher  rate  of  interest,  which  would  vary 
substantially  in  different  states.  Wherever  cheaper 
funds  can  be  tapped,  it  should  be  done.  Some  states 
have  insurance  funds  in  connection  with  the  Work- 
men's Compensation  Act.  A  fair  percentage  of  these 
funds  should  be  invested  in  housing  loans.  The 
funds  of  the  German  Old  Age  and  Invalidity  In- 
surance Institutes  are  used  very  extensively  for 
housing  loans.  There  is  no  reason  why  savings  banks 
should  not  be  required  to  invest  a  certain  proportion 
of  their  deposits  in  housing  loans  at  a  very  small 
advance  in  interest  rate  on  what  they  pay  their  de- 
positors. 

All  these  provisions  should  be  carefully  guarded  so 
as  to  benefit  those  for  whom  they  were  intended — 
the  lower-paid  wage  earners — and  not  add  to  the 
profits  of  the  speculative  builder. 

1  See  also  Report  of  the  Housing  Committee  of  the  Reconstruc- 
tion Commission  of  the  State  of  New  York,  March  26,  1920. 

2  See  Housing  of  the  Unskilled  Wage  Earner,  pp.  229,  266-7. 

3  See  Housing  of  the  Unskilled  Wage  Earner,  pp.  263-272. 


202  THE  HOUSING  FAMINE 


TOPIC  VII 

FIRST  ARGUMENT 

By  Frederick  L.  Ackerman 

1.  Eliminate  system  of  price  competition  and  organ- 

ize production  and  distribution  upon  co-oper- 
ative basis.  Produce  for  use  and  not  for  profit. 
Relation  of  milk  business  to  babies  and  housing. 

2.  Mrs.  Wood  advocates  variety  of  measures  of 

make  believe  production.  Continues  to  ignore 
concentration  of  wealth  as  most  important  fac- 
tor. Curtailment  of  production  would  continue 
as  now. 

3.  Mr.  Murphy  also  fails  to  deal  with  the  all  im- 

portant factor— but  he  recognizes  it  and  says  so. 

Stated  in  terms  of  the  housing  problem,  the  next 
step  should  seek  to : 

(a)  Turn  the  never  ceasing  flow  of  population  from 
farm  to  industrial  center  back  upon  itself — or 
in  less  Utopian  terms,  arrest  the  flow. 

(6)  Arrest  the  tendencies  within  urban  centers 
toward  an  ever  increasing  degree  of  conges- 
tion, 


WHAT  ARE  THE  FIRST  STEPS?  203 

(c)  Provide  adequate  homes  in  adequate  surround- 
ings for  all.  The  argument  heretofore  ad- 
vanced has  denied: 

(1)  The    validity    of    the    theory    of    subvention 

(e.g.)  such  as  have  been  resorted  to  in 
Europe  in  an  effort  to  affect  the  aims  as 
above  stated. 

(2)  That  the  aims  as  set  forth  are  to  be  achieved 

through  the  workings  of  our  present  eco- 
nomic industrial  system  as  it  has  thus  far 
run  its  course  in  the  United  States. 

The  next  step  consists  in  making  a  decision  as  to 
which  road  we  shall  follow  in  extricating  ourselves 
from  the  present  muddled  state  of  affairs.  One 
leads  toward  Government  subvention  aimed  at  sup- 
porting the  present  economic  industrial  system;  the 
other  takes  the  direction  of  leading  to  the  complete 
reorganization  of  that  system.  The  choice  here  made 
is  expressed  by  the  latter. 

We  may  now  restate  the  problem  in  terms  of  in- 
dustrial production.  Our  aims  now  appear  as  fol- 
lows: 

(a)  "To  eliminate  those  practices  of  business  com- 
petition which  curtail  the  output  or,  by  dupli- 
cation of  equipment  and  cancellation  of  effort, 
increase  the  labor  and  material  cost  of  the 
product.' f 

(6)  To  arrest  the  diversion  of  labor  and  resources  to 
useless  or  socially  superfluous  purposes. 


204  THE  HOUSING  FAMINE 

To  do  away  with  the  vast  amount  of  waste  and 
the  canceled  effort,  is  not  a  matter  which  may  be 
approached  by  piece-meal  process.  If  we  approach 
this  matter  by  way  of  "  combination/  '  operated  in 
restraint  of  trade  as  must  be  the  case  under  the 
present  economic  system,  we  quickly  discover  that 
it  does  not  help  in  the  least — besides  such  action  is 
disallowed  by  the  courts.  Obviously  this  is  not  the 
way  out  of  the  muddle. 

^EEDS  VS.    FINANCIAL   EXPEDIENCY 

We  are  seeking  to  effect  industrial  combination  in 
the  sole  interest  of  technological  needs  instead  of  in 
the  sole  interests  of  financial  expediency.  That  is  to 
say,  we  are  seeking  to  produce  useful  goods.  Surely 
there  can  be  no  harm  to  any  one  in  expressing  such 
a  desire.  But  this  simple,  obvious  common  sense 
statement  of  the  case  takes  on  a  different  color  when 
it  is  stated  in  terms  of  action.  For  what  this  means 
is  no  less  than  the  disallowance  of  investment  for 
profit. 

This  proposal  is  not  a  "business  proposition' '  true 
enough;  for  investment  for  a  profit  is  what  makes 
the  wheels  go  round  in  business.  But  it  is  a  pro- 
duction (technological)  proposition;  for  it  is  invest- 
ment for  a  profit  which  sets  in  motion  the  whole 
system  of  price  competition  which  results  in  waste, 
sabotage  and  a  cancellation  of  effort. 


WHAT  ARE  THE  FIRST  STEPS?  205 


MODERN  BUSINESS — A   CURIOUS  ACTIVITY 

Thinking  as  we  do  in  terms  of  " business' '  it  is  not 
likely  that  we  will  take  kindly  to  this  step  proposed. 
But  the  absurdity  of  the  situation  in  which  we  have 
placed  ourselves  with  respect  to  producing  what  we 
must  produce  may  be  illustrated  by  a  heading  which 
appeared  in  a  New  York  paper  of  recent  date.  The 
heading  related  to  an  order  issued  by  a  milk  dis- 
tributing corporation  to  the  farmers  to  the  effect  that 
the  production  of  milk  should  be  curtailed  in  order 
to  keep  prices  up.  The  heading  read:  "Too  mucin 
milk  to  sell  but  not  enough  to  drink/9  This  described 
accurately  the  situation  both  as  regards  the  children 
in  the  city  and  the  investment  for  a  profit  system 
which  controls  the  industry.  Everybody  acted  quite 
properly  in  this  matter ;  under  the  system  no  blame 
is  to  be  attached  to  any  one. 

But  lifted  out  of  its  complicated  financial  setting 
of  make  believe  production,  this  human  interest  in- 
cident, revealing  the  underlying  principle  upon 
which  our  modern  industrial  system  goes  at  its  task 
of  providing  for  the  needs  of  a  people,  should  appeal 
to  any  one  as  a  tragic  enterprise.    So  it  is. 

In  this  incident,  we  have  revealed  the  nature  of 
the  housing  problem.  For  it  is  by  this  system  of 
curtailment,  restriction,  cancellation  of  effort  as  re- 
gards the  use  of  land,  the  production  of  materials, 
the  rendering  of  services  and  the  construction  of 
buildings,  that  we  come  by  congestion  of  population, 
inadequate  houses  and  a  shortage  of  houses,     It  is 


206  THE  HOUSING  FAMINE 

not  the  State  that  has  failed;  it  is  modern  business 
enterprise. 

NOT  ALTOGETHER  A  MATTER  OF  CHOICE 

Whether  the  losses,  wastes  and  cancellations  of 
effort  may  be  eliminated  depends,  for  the  time  being, 
upon  the  attitude  of  those  in  control  of  business  and 
financial  interests  towards  the  disallowance  of  invest- 
ment for  a  profit.  To  decide  against  such  a  "next 
step"  will  not  dispose  of  the  matter.  The  step  sug- 
gested will  have  to  be  taken,  there  is  no  doubt,  for 
the  present  economic  system  is  due  to  collapse  under 
the  constantly  increasing  weight  of  its  own  useless, 
non-productive  motions  and  cancellations  of  effort. 


WHAT  ARE  THE  FIRST  STEPS?  207 


TOPIC  VII 
SECOND  ARGUMENT 

By  John  J.  Murphy 

EVOLUTION   OR   REVOLUTION 

Candor  compels  the  statement  that  under  this  head 
my  opponents  have  offered  little  that  is  practical,  and 
what  they  offer  that  is  practical  seems  to  be  wrong. 
Mr.  Ackerman  indicts  the  social  order  once  more  and 
points  to  its  wastefulness  and  inefficiency.  Much  of 
all  that  he  says  may  be  conceded  without  bringing 
us  any  nearer  to  the  question  how  to  get  more  houses. 
Clearly,  we  cannot  wait  until  a  majority  of  the  people 
or  their  representatives  come  around  to  his  way  of 
thinking.  We  will  have  a  solution  or  a  revolution 
sooner. 

ACQUISITION     OF     PROPERTY     THE     DOMINANT     MOTIVE 

Common  experience  teaches  us  the  truth  which  lies 
at  the  basis  of  economics,  that  man  seeks  to  satisfy 
his  needs  and  desires  with  the  least  possible  exertion. 
Such  being  the  fact,  he  has  always  wanted  to  possess 
those  things  which  will  enable  him  to  induce  or  com- 
pel others  to  minister  to  his  needs.    In  a  material 


208  THE  HOUSING  FAMINE 

way,  those  things  are  what  we  call  property.  To  the 
extent  that  this  tendency  in  man  causes  him  to  serve 
others,  in  order  that  others  may  serve  him,  it  is  en- 
tirely conducive  to  the  general  well-being.  Even 
when  men  compete  with  one  another  for  the  chance 
to  serve  each  other  in  order  that  they  may  be  served 
in  return,  no  harm  is  done.  But  a  new  situation 
arises,  when  through  social  ignorance  some  men 
are  permitted  to  become  possessed  of  certain  kinds  of 
property  which  are  not  the  product  of  any  one's  ser- 
vice, and  are  permitted  to  exact  service  from  others 
without  rendering  equal  service  themselves.  This 
condition  lies  at  the  base  of  the  social  evils  of  which 
Mr.  Ackerman  complains,  but  it  is  not  going  to  be 
altered  until  men  perceive  it  clearly. 

THE  THEORY  WILL  NOT  WORK 

As  for  Mrs.  Wood's  suggestions  under  this  head, 
there  is  little  to  be  said  against  them.  There  is  little 
against  her  theory  but  its  ill-success.  Of  the  creation 
of  new  governmental  machinery  there  is  no  end.  It 
will  soon  be  true  to  say  (as  we  said  of  European 
peasants  that  each  man  worked  with  a  soldier 
strapped  on  his  back)  that  each  of  us  will  soon  be 
working  with  an  official  seated  on  his  shoulders. 
Even  the  red  tape  they  will  use  will  be  a  serious 
charge  in  this  day  of  costly  cotton.  Europe  has  been 
trying  to  pay  Paul  without  robbing  Peter  for  gen- 
erations, but  the  plan  has  not  worked.  America, 
without  any  housing  commissions,  has  had  better  pop- 


WHAT  ARE  THE  FIRST  STEPS?  209 

ular  housing  than  Europe  has  ever  dreamed  of, 
except  for  the  limited  wealthy  class.  That  is  because 
we  have  had  a  measure  of  freedom  here.  If  we  look 
to  government  rather  than  to  ourselves  for  solution 
of  our  problems  we  shall  be  in  a  bad  way. 

GOVERNMENT  NOT   CONSTRUCTIVE 

fJhe  nature  of  government  is  preventive,  not  con- 
structive; inhibitive,  not  directive;  when  it  abandons 
its  true  function  it  is  often  merely  destructive.  It 
is  forced  to  lay  down  general  rules  which  work  grave 
injustices  in  particular  cases.  It  is  never  wiser  than 
some  man  and  is  often  more  foolish  than  a  multitude. 
Even  its  benevolence  has  disastrous  results  some- 
times, which  fairly  parallel  the  well-known  story 
of  the  elephant  which  had  struck  up  an  acquaintance 
wTith  a  setting  hen.  Noting  one  day  that  she  had 
left  her  eggs,  the  kindly  quadruped  tried  to  replace 
her.  The  animal's  motives  were  most  creditable, 
but  the  results  were  deplorable,  showing  that  some- 
thing more  than  power  and  good  intentions  are 
necessary  to  achieve  desirable  results.  Government 
is  more  often  the  expression  of  the  collective  ignor- 
ance and  prejudice  of  the  mass  than  of  its  collective 
wisdom.  Whenever  there  is  unsatisfied  effective 
demand,  supply  rushes  to  meet  it;  if  government 
will  only  stand  aside,  the  two  will  meet. 


210  THE  HOUSING  FAMINE 


TOPIC   VII 
SECOND   ARGUMENT 

By  Edith  Elmer  Wood 

good  as  far  as  they  go 

We  now  have  the  programme  of  the  individualists 
complete.    Let  us  sum  it  up : 

1.  Take  the  tariff  off  building  materials.    This  is, 

fairly  enough,  the  lifting  of  a  brake.  It  will 
be  hard  to  lift,  for  not  only  will  the  business 
interests  affected  object  strenuously,  but 
American  labor  is  pretty  well  persuaded  that 
it  needs  a  tariff  wall  to  keep  up  wages. 

2.  Take  the  tax  off  of  income  from  mortgages. 

This  is  another  brake  that  may  legitimately 
be  lifted. 

3.  Tax  vacant  land  into  use.    This  is  the  applica- 

tion of  a  brake,  not  the  removal  of  one. 

4.  Compel  the  railroads  to  grant  priority  to  build- 

ing materials — another  brake  applied. 
With  all  these  recommendations,  I  am  reason- 
ably in  accord.  I  feel  sure  some  would  be  helpful, 
and  should  be  glad  enough  to  see  the  others  tested. 
But  they  are  merely  auxiliary.  As  a  complete  pro- 
gramme, they  would  be  pitifully  inadequate. 


WHAT  ARE  THE  FIRST  STEPS?  211 


OFFERING  TRIBUTE  TO  THE   BARBARY  PIRATES 

So  Mr.  Murphy  must  feel,  for  he  lays  most  em- 
phasis on  his  utterly  shocking  proposal  to  subsidize 
landlords  at  the  expense  of  other  taxpayers.  When 
discussing  tax  exemptions,  his  proposal  was  that  new 
dwellings  be  tax-exempt  for  10  or  12  years.  His 
proposal,  now,  apparently,  is  to  exempt  all  dwellings 
for  10  years.  "  These  revenues  could  be  raised  in 
other  ways,"  he  says.  How,  for  instance?  And 
would  the  people  to  whom  the  burden  was  to  be 
transferred  be  apt  to  accept  it  meekly? 

Supply  and  demand  are  indeed  moribund  when 
their  apostle  has  to  galvanize  them  into  an  appear- 
ance of  life  with  such  batteries  of  state  action! 
"  Hands  off,  and  the  devil  take  the  hindermost" 
was  brutal,  but  at  least,  those  who  preached  and 
practiced  it  did  not  use  to  ask  for  alms! 

Mr.  Murphy  is  afraid  we  shall  underestimate  the 
importance  of  his  proposal.  Not  I,  for  one.  I  con- 
sider it  as  revolutionary  as  Mr.  Ackerman's — and 
much  more  immoral. 

THE   MIND   CURE   FOR   HOUSING   TROUBLES 

Mr.  Aekerman  says  that  "the  next  step"  should 
do  three  things : 

1.  Arrest  the  flow  of  population  from  farm  to  in- 

dustrial center. 

2.  Arrest  the  tendencies  within  urban  centers  to- 

ward an  ever-increasing  degree  of  congestion. 


212  THE  HOUSING  FAMINE 

3.  Provide  adequate  homes  in  adequate  surround- 
ings for  all. 

That  would  certainly  be — only  the  vernacular  is 
adequate  to  express  our  feelings — some  step!  The 
giant  of  our  childhood,  with  his  seven-leagued  boots, 
was  a  piker  in  comparison.  "We  should  have  been 
content  to  devote  a  life-time  of  steps  to  accomplish- 
ing half  of  that. 

But  our  hopes  of  a  miracle  are  short-lived,  for 
we  are  told,  a  few  lines  farther  along  that  "The  next 
step  consists  in  a  decision  as  to  which  road  we  shall 
follow.' '  Evidently,  so  far  as  Mr.  Ackerman  is  con- 
cerned, choosing  a  road  is  the  same  thing  as  arriving 
at  the  end  of  it.  Happy  man!  Some  of  the  rest 
of  us  see  so  many  weary  miles  stretching  between. 


WHAT  ARE  THE  FIRST  STEPS?  213 


TOPIC  VII 
SECOND   ARGUMENT 

By  Frederick  L.  Ackerman 

Mrs.  Wood  brings  her  argument  to  a  well-organ- 
ized conclusion  and  suggests  the  necessary  legislative 
enactments  and  administrative  machinery  for  carry- 
ing out  the  plans  she  has  so  ably  presented.  With 
what  she  has  to  say  with  respect  to  the  organization 
of  technical  knowledge,  of  course  I  agree.  Beyond 
that  point  I  decline  to  follow. 

WOULD  NOT  MAKE   MUCH  DIFFERENCE   AFTER  ALL 

The  reason  may  be  simply  stated.  Generally 
speaking,  her  programme  as  regards  action,  is  con- 
fined to  the  realm  of  finance.  It  is  a  shifting  about 
of  loan  credit  arrangements;  but  the  only  real 
change  suggested  in  the  processes  through  which 
the  mass  of  houses  are  built,  is  the  elimination  (in 
the  case  of  municipal  housing)  of  the  last-in-line 
speculator  in  land  and  the  elimination  (in  some 
cases)  of  the  speculative  builder. 

She  says  that  the  measures  are  "  purely  prelim- 
inary/'    But  these  preliminary  measures  are  all 


214  THE  HOUSING  FAMINE 

headed  in  a  definite  direction — and  it  is  to  be  as- 
sumed that  future  measures  will  follow  the  same 
general  course. 

MBS.   WOOD  OVERLOOKS  SOMETHING  IMPOSTANT 

It  is  not  that  the  several  measures  advocated 
would  do  any  particular  harm  beyond  supporting 
a  financial-industrial  system  which  is  working  at 
cross  purposes  and  against  us  with  respect  to  the 
aims  expressed.  It  is  rather  that  her  entire  pro- 
gramme is  completely  beside  the  point.  It  is  staged 
entirely  in  the  realm  of  make-believe-production.  It 
does  not  touch  the  world  of  industry  (technology — 
workmanship — industrial  relations)  at  a  single  point. 
Now  I  contend  that  if  what  is  spoken  of  as  a  remedy 
is  to  be  found,  that  remedy  will  be  in  the  nature 
of  releasing  industry  from  financial  control.  Indus- 
try is  a  matter  of  workmanship — technology  and  not 
a  matter  of  finance — of  profit  upon  investment. 

Mr.  Murphy  again  stresses  the  interference  of 
Government  as  a  cause.  Possibly  Government  has 
interfered — that  is  somewhat  beside  the  point  when 
the  problem  is  viewed  from  a  sufficiently  broad  angle 
and  with  respect  to  a  sufficient  period  of  time. 

WE   REVIEW   A  LITTLE   HISTORY 

I  now  return  to  my  introduction.  I  ask  you  to 
recall  my  summary  reference  to  the  drift  of  events 
which  set  in  a  century  and  a  h^lf  ago,  following 
the  introduction  of  the  machine  process  and  the 


WHAT  ARE  THE  FIRST  STEPS?  215 

emerging  system  of  financial-business  in  control  of 
industry.  I  ask  you  to  also  follow  the  drift  of  events 
through  the  last  century  as  industrial  urban  centers 
came  into  being — congested — sordid — wretched — 
mostly  slum.  I  ask  you  to  recall  how  all  this  came 
about  under  the  rule  of  natural  rights,  self  help  and 
free  bargaining — free  also  from  Governmental  in- 
terference. I  ask  you  to  recall  all  this  with  a  view 
of  asking  you  finally: 

What  set  all  this  a-going?  What  sucked  people 
into  industrial  centers?  What  caused  the  slum? 
What  caused  the  shortage  ?  Was  it  not  the  gradual 
concentration  of  economic  power  in  the  hands  of 
individuals  and  the  legal  right  of  individuals  to  the 
exclusive  use  and  abuse  of  the  means  and  materials 
on  which  the  life  of  the  community  depends? 


216  THE  HOUSING  FAMINE 


TOPIC   VII 
THIRD   ARGUMENT 

By  John  J.  Murphy 

DO   FISHERMEN   CARRY  BAIT  TO   FEED   THE   FISH 
OR   TO    CATCH   THEM? 

As  we  reach  a  conclusion,  our  differences  seem 
to  disappear,  but  we  come  down  to  a  really  funda- 
mental difference  as  to  statement,  rather  than  as 
to  substance.  Mrs.  Wood,  with  an  acuteness  of 
perception  which  does  her  credit  as  a  debater,  if 
not  as  a  philosopher,  voices  one  of  the  strongest 
objections  to  the  programme.  "What?"  she  de- 
mands, "are  you  going  to  pay  tribute  to  the  pirate 
who  is  now  robbing  the  people  by  unjust  rents,  and 
give  him  moret" 

COMPETITION,   THE   SOLE  EFFECTIVE  REGULATOH 

I  have  already  indicated  that  the  landlord,  in  the 
vast  majority  of  cases,  is  only  registering  a  scarcity, 
and  that  the  abnormal  rise  in  prices,  by  inducing 
new  building,  will  ultimately  destroy  itself  by  ac- 
celerating production  to  a  point  where  the  competi- 


WHAT  ARE  THE  FIRST  STEPS?  217 

tion  for  tenants  will  be  as  keen  as  it  is  now  for 
apartments  and  houses.  We  can  greatly  hasten  the 
coming  of  that  time,  by  making  the  exemption  for 
which  I  have  argued.  Thousands  of  people  who 
opposed  the  idea  originally  have  come  to  believe  in  it. 


218  THE  HOUSING  FAMINE 


TOPIC  VII 
THIRD   ARGUMENT 

By  Edith  Elmer  Wood 

what  constitutes  success? 

Mr.  Murphy  says  he  has  nothing  against  my  theory 
but  its  ill  success. 

Eef erring  to  what? 

When  New  Zealand  state  loans  enable  1000  work- 
men per  year  to  become  home  owners,  which,  con- 
sidering the  difference  in  population,  would  be 
equivalent  to  140,000  in  the  United  States,  I  call 
that  fairly  successful. 

A  policy  which  has  produced  homes  for  54,632 
Belgian  workingmen's  families  (equivalent  to  nearly 
a  million  families  in  our  country)  seems  to  me  far 
from  a  failure. 

A  MATTER   OF   OPINION,    OF   COURSE 

Mr.  Murphy's  statement  that  "America  without 
any  housing  commissions  has  had  better  popular 
housing  than  Europe  has  ever  dreamed  of"  seems 
better  suited  to  a  Fourth  of  July  oration  than  to 
a   serious    discussion.      The    consensus    of   opinion 


WHAT  ARE  THE  FIRST  STEPS?  219 

among  international  authorities  is  that  the  best 
working  class  housing  in  the  world,  and  the  lowest 
death  rates  (this  last  not  a  matter  of  opinion)  are 
found  in  English  garden  cities  and  garden  suburbs. 
The  best  we  have  in  this  country,  the  war  undertak- 
ings of  the  Housing  Corporation  and  the  Shipping 
Board,  were  modeled  after  them. 

WHY   REPEAT? 

As  for  Government's  being  preventive  and  not 
constructive,  I  refer  the  reader  to  my  comments  in 
the  last  (sixth)  rebuttal. 

I    AM    REALLY    OFFERING    MR.    ACKERMAN    A   LIFE    LINE 

My  thanks  to  Mr.  Ackerman  for  his  kind  remarks 
about  my  "well-organized  conclusion.' '  I  am  sorry 
he  can't  see  that  the  course  I  have  outlined  affords  the 
only  practical  way  of  starting  for  the  goal  he  has 
in  view,  though  it  is  quite  true  that  it  does  not 
necessarily  lead  there.  This,  to  those  who  do  not 
like  the  looks  of  his  goal,  is  not  altogether  a  dis- 
advantage. 


220  THE  HOUSING  FAMINE 


TOPIC    VII 

THIRD   ARGUMENT 

By  Frederick  L.  Ackerman 

MR.    MURPHY   DEFINES   THE    ISSUE.      MRS.    WOOD 
GROWS   IMPATIENT 

No  space  here  to  deal  with  the  fallacious  theory 
which  passes  current  that  "men  are  endowed  with 
an  inherent  and  inalienable  love  of  indolence ' f  4  ex- 
pressed by  Mr.  Murphy  in  the  second  paragraph  of 
his  final  argument  on  this  head.  This  fallacy  is 
exposed  by  Thorstein  Veblen  in  "The  Instinct  of 
Workmanship. ' ' 

LARGELY  A  MATTER  OF  PERCEPTION 

Mr.  Murphy  grasps  the  situation  when  he  says 
"some  men  become  possessed  of  certain  kinds  of 
property  which  are  not  the  produce  of  any  one's 
service,  and  are  permitted  to  exact  services  from 
others  without  rendering  equal  services  themselves. ' 9 
There  you  have  it !  Of  course,  as  Mr.  Murphy  says, 
this  condition  "is  not  going  to  be  altered  until  men 
perceive  it."    That  men  may  more  clearly  "perceive 


WHAT  ARE  THE  FIRST  STEPS?  221 

it"  is  precisely  the  aim  of  my  argument.  When 
men  do  " perceive  it";  when  they  come  to  "under- 
stand more  clearly  that  "the  right  of  individuals 
to  the  exclusive  use  and  abuse  of  the  means  and 
materials  on  which  the  life  of  the  community  de- 
pends" is  what  makes  for  the  confusion  of  the 
present — when  this  is  made  plain — it  is  to  be  assumed 
that  these  rights  will  come  in  for  a  thoroughgoing 
revision.  When  they  have  come  in  for  such  a  revi- 
sion we  will  then  be  on  our  way  toward  solving  the 
housing  problem. 

MRS.    WOOD    GROWS   IMPATIENT 

Mrs.  Wood  would  have  me  appear  as  one  who 
would  rest  content  with  merely  making  a  "decision" 
as  to  the  "next  steps"  to  take.  I  fully  realize  the 
problem  before  us,  and  advisedly  I  put  the  matter 
as  I  did,  for  I  am  thoroughly  convinced  that  no 
benefit  whatsoever  could  possibly  accrue  from  the 
action  suggested  by  Mrs.  Wood  so  long  as  our  system 
of  loan  credit  and  banking  runs  in  the  direction  of 
ever  increasing  inflation ;  so  long  as  financial  business 
runs  in  the  direction  of  more  wasteful  competition 
and  in  the  direction  of  creating  more  useless  activi- 
tise  and  performing  more  useless  services. 

The  "next  step"  is  not  even  a  decision  as  to  what 
to  do.  It  is  primarily  that  of  discovering  what  is 
the  matter.  It  is  with  this  phase  of  the  question 
that  I  have  dealt  almost  exclusively.  Nor  do  I 
assume    that    it    is    possible    for   us    to   take    any 


222  THE  HOUSING  FAMINE 

"next    step"    immediately    which    will    materially 
modify  conditions. 

Merely  saying  that  what  I  suggest  is  "some  step" 
does  not  make  it  at  all  clear  that  it  is  not  the  proper 
step  to  take. 

4  See  "  The  Economics  of  the  Social  Uplift,' ■  by  Leon  Ardz- 
rooni.  Political  Science  Qvarterly,  Vol.  XXXV,  No.  1,  March, 
1920. 


topic  vin 

SUMMARY   AND   CONCLUSION 


SUMMARY   AND   CONCLUSION 

By  John  J.  Murphy 

Fundamental  cause  of  housing  famine  rests  upon 
an  industrial  condition  which  does  not  enable  a 
great  mass  of  workers  to  earn  enough  to  provide 
their  families  with  sanitary,  safe  and  agreeable 
homes.  This  fact  is  unchanged  by  apparent  rise  in 
wages.  To  meet  present  emergency  we  must  resort 
to  alleviations.  Remedy  for  the  whole  social  prob- 
lem too  vast  a  subject  for  limits  of  this  argument. 
Self-reliance  has  solved  our  problems  in  the  past; 
it  will  solve  this  one,  if  we  use  our  brains. 

ALLEVIATION  NECESSARY  BEFORE   FUNDAMENTAL  CURE 

Under  this  head  I  propose  to  recapitulate  the 
causes,  leading  to  the  housing  shortage  and  the 
policy,  which  must  be  followed,  if  we  are  to  restore 
even  our  former  moderate  housing  supply.  Not  that 
I  regard  the  former  condition  as  satisfactory,  but 
compared  with  present  conditions  it  seems  ideal  in 
the  retrospect.  The  point  is  fairly  illustrated  by 
the  following  story.  During  the  war,  Commander 
Wedgwood,  an  English  member  of  Parliament, 
speaking  at  Cooper  Union,  New  York,  said:  "The 

225 


226  THE  HOUSING  FAMINE 

working  classes  in  England  are  praying  for  the 
return  of  peace,  because  they  have  forgotten  what 
peace  was  like  for  them.,,  So  with  us,  many  would 
hail  with  joy  the  return  of  pre-war  housing  condi- 
tions, even  though  20%  of  our  population  were  then 
living  in  houses  below  proper  hygienic  standards. 

WAGES  BELOW  LIVING   COST 

The  fundamental  reason  for  such  a  condition  was 
that  fully  20%  of  our  population  were  not  earning 
living  wages,  and  were  therefore  unable  to  pay  rents 
sufficient  to  secure  good  houses.  Low  wages  were 
due  to  the  existence  of  a  surplus  labor  supply,  caused 
in  its  turn  by  lack  of  means  for  self-employment  due 
to  land-monopoly.  Now  we  have  a  situation,  in 
which  wages  and  rent  are  nominally  high,  but  the 
relation  between  them  remains  the  same.  With 
nominally  high  wages  the  poor  man  is  still  unable 
to  obtain  adequate  accommodations,  because  rents 
have  risen  so  much.  Indeed  a  much  larger  number 
of  city  people  are  now  living  under  unsanitary  con- 
ditions than  in  1914.  The  situation  is  the  same  as 
that  so  touchingly  described  by  Mr.  Dooley  in  his 
unregenerate,  radical  days.  He  said  in  substance, 
"Whether  wages  are  high  or  low,  the  workman 
remains  about  the  same  number  of  jumps  behind 
the  porterhouse  steak.' '  So  does  the  unskilled 
laborer  lag  behind  the  sanitary  and  satisfying  house 
or  apartment. 


SUMMARY  AND  CONCLUSION  227 


AN  ORGANISM  NOT  A  MECHANISM 

To  my  mind  the  social  organization  is  a  growth, 
not  a  mechanism.  Just  as  some  of  the  functions  of 
the  human  body  are  instinctive  and  subconscious, 
while  some  are  reasoned  and  are  conscious,  so  in 
the  social  body  we  have  parallel  conditions.  Food 
supply  and  shelter  supply  are  among  the  most 
primitive  of  human  needs  and  their  supply  is  among 
the  most  instinctive  of  human  functions.  If  for  any 
reason,  society  should  fail  to  desire  to  furnish  these 
things,  government  agencies  would  not  help  us  much. 
Our  situation  would  be  like  that  of  a  wounded  man 
whose  bones  refuse  to  knit  or  whose  flesh  refuses 
to  heal.  Dissolution  would  not  be  far  off.  All  that 
we  can  do  in  such  a  case  is  to  find  out  if  we  are 
obstructing  the  operation  of  the  natural  process, 
create  conditions  propitious  to  healing  and  let  nature 
take  its  course. 

I  have  shown  how  Government,  with  the  best  in- 
tentions, has  balked  the  natural  supply  of  housing. 
By  taxing  the  production  of  all  things  that  go  into 
the  making  of  a  house,  by  taxing  the  money  that 
must  be  borrowed  for  the  building  of  houses,  by 
heavily  taxing  the  house  itself  when  completed,  it 
makes  investment  in  houses  dubious  and  prevents 
the  normal  flow  of  capital  into  a  safe  investment,  on 
which,  under  present  conditions,  a  large  return  could 
be  paid.  At  the  same  time,  by  undertaxing  valuable 
land,  it  permits  that  essential  item  in  house  con- 
struction to  be  held  at  prices  which  present  in  or- 


228  THE  HOUSING  FAMINE 

dinary  times  a  serious  impediment  to  development. 
It  seems  too  clear  to  need  argument,  that  before  we 
call  upon  government  to  lend  artificial  aid  to  building 
we  should  insist  on  its  removing  the  handicaps  which 
it  now  imposes  on  private  construction.  Otherwise 
we  shall  be  merely  urging  a  waste  of  energy,  due  to 
government  taking  with  one  hand  what  it  gives  with 
the  other. 

GOVERNMENT  A   NECESSARY   EVIL 

Mrs.  Wood  asks  "Is  Government  only  a  necessary 
evil?"  I  have  no  hesitation  in  replying,  that  that 
is  the  proper  angle  from  which  it  must  be  regarded. 
As,  however,  I  regard  it  as  just  as  necessary  in 
some  of  its  manifestations  as  it  is  evil  in  others, 
I  have  no  sympathy  with  the  point  of  view  of  the 
philosophic  anarchist.  Most  of  the  remedial  legisla- 
tion enacted  is  necessary  because  of  previous  unwise 
legislation.  It  is  obliged  to  resort  constantly  to  the 
police  power,  because  at  one  time  or  another  it  has 
given  to  some  people  special  privileges  which  later 
it  tries  to  neutralize,  usually  unsuccessfully,  and 
nearly  always  insincerely  (witness  the  Sherman 
Law). 

BOGUS  REMEDIAL  LEGISLATION 

Mrs.  Wood  seems  to  think  that  she  is  making  a 
point  by  indicating  that  the  English  Housing  Act 
was  only  passed  in  1919.  Eeally  this  statement  pre- 
judices her  case  very  much.     I  concede  that  the 


SUMMARY  AND  CONCLUSION  229 

latest,  and  let  us  hope  the  last,  Housing  Act  was 
passed  at  that  time,  but  it  is  only  the  youngest  scion 
of  a  long  family  of  failures,  and  I  can  not  put  this 
fact  too  strongly.  It  is  afflicted  with  all  the  heredi- 
tary defects  derived  from  a  futile  ancestry.  It 
is  hardly  too  much  to  say  that  up  to  the  end  of 
last  year,  England  had  enacted  as  many  housing 
laws  as  she  has  built  houses !  I  have  said  that  this 
may  be  the  last  housing  act,  because  it  would  seem 
as  if  a  semi-centenary  of  failures  would  convince 
even  the  House  of  Commons  that  it  cannot  forever 
bamboozle  the  people  with  bogus  remedial  legislation, 
pretending  to  afford  relief,  which  it  never  gives. 

SOPS  TO   PUBLIC   SENTIMENT 

Of  course,  my  statement  is  not  to  be  taken  as 
denying  that  at  certain  times  and  in  certain  places, 
municipal  corporations  have  built  blocks  ot  houses, 
or  that  private  philanthropists  have  done  the  same, 
but  all  the  enterprises  cited  are  so  infinitesimally 
small  beside  the  task  which  we  confront  that  no 
comparisons  can  be  made  which  would  be  of  any 
value.  There  may  be  some  public  ventures  in  hous- 
ing which  have  paid  their  own  way,  but  they  are 
rare,  while  the  number  that  have  to  be  helped  out 
of  taxes  is  great. 

A  MISLEADING   BEACON   OF  SAFETY 

But  when  all  is  said  and  done,  the  barrier  of 
delay  still  stands  in  the  way  of  securing  appropria- 


230  THE  HOUSING  FAMINE 

tions.  After  the  legislative  sanction  is  obtained, 
the  people  of  the  whole  state  in  which  it  is  to  be 
made  operative  have  to  vote  upon  it,  and  after  all 
that  is  done,  there  will  still  be  legal  questions  as  to 
whether  to  use  the  taxing  power  for  such  a  purpose 
would  not  be  contrary  to  the  Federal  Constitution. 
Indeed,  so  little  probability  is  there  of  the  realiza- 
tion of  such  a  programme  that  it  might  seem  waste 
of  time  to  argue  against  it,  but  the  danger  of  it  is 
that  because  it  seems  specious  and  attractive,  it 
will  draw  away  earnest  persons  who  will  seek  the 
proverbially  dangerous  " easiest  way"  and  waste 
energies  that  might  be  profitably  employed  in 
furthering  a  practical  solution. 

MONOPOLY  IN  FULL  CONTROL 

There  are  many  ideas  latent  in  Mr.  Ackerman's 
proposals  with  which  I  feel  some  sympathy.  It  can 
not  be  denied  that  monopolistic  control  of  production 
has  attained  such  completeness,  that  it  can  not  well 
go  further,  and  hence  as  there  is  no  such  thing  as 
an  equilibrium  in  human  affairs,  it  must  tend  to 
recede.  Quite  unintentionally  perhaps  the  cards  have 
been  stacked  for  it  by  Government,  and  now  they 
control  the  dealer.  But  his  proposals  envisage  the 
reconstruction  of  human  society,  and  lead  into  so 
many  other  channels  that  I  have  not  the  space  to 
examine  them  all.  To  solve  the  problem  of  the 
individual  has,  so  far  in  our  history,  lain  with  the 
individual,  and  he  has  proved  in  the  main  equal 


SUMMARY  AND  CONCLUSION  231 

to  the  task;  not  absolutely,  of  course — but  as  com- 
pared with  any  other  nation  or  state  of  human 
society,  this  is  broadly  true.  That  is  the  only  fair 
standard  that  we  have.  Shall  we  wander  off  into 
untried  paths,  or  rather  paths  which  other  people 
have  tentatively  tried  and  found  to  lead  to  futility, 
or  shall  we  try  to  remove  the  obstacles  which  we 
have  unwittingly  strewn  in  our  path  and  proceed 
along  the  lines,  which  have  brought  us  material 
power,  prosperity  and  opportunities,  greater  than 
any  hitherto  known  to  any  section  of  the  human 
race? 


232  THE  HOUSING  FAMINE 


SUMMARY   AND   CONCLUSION 

By  Edith  Elmer  Wood 

The  American  people  are  neither  radicals  nor  reac- 
tionaries. They  stand  for  orderly  progress  and  a 
square  deal  for  all.  Therefore  the  housing  of  lower 
paid  wage  earners  will  be  removed  from  the  domain 
of  business  enterprise,  which  does  not  want  it,  and 
taken  over  by  the  state  as  a  public  utility. 

HOW   FAR   WE   AGREE 

"We  are  agreed  as  to  the  seriousness  of  the  housing 
famine  and  the  menace  of  congestion,  which  even 
Mr.  Murphy  says  endangers  "the  very  life  of  our 
nation  and  civilization." 

I  think1  we  agree  that  the  way  to  end  a  house 
famine  is  to  build  new  houses;  that  new  houses 
can  not  be  supplied  at  a  profit  to  the  lower-paid 
groups  of  wage  earners;  that  tax  exemptions  are 
subsidies;  that  speculation  in  land  can  and  should 
be  checked  by  taxation;  and  that  governments  can 
borrow  money  at  cheaper  rates  than  individuals. 

I  hope  we  agree  that  every  man  who  works  hon- 
estly day  by  day  is  entitled  to  return  at  night  to 
a  comfortable  home  in  which  he  can  raise  a  family 
in  health,  contentment  and  self-respect. 


SUMMARY  AND  CONCLUSION  233 


WHERE   WE   DIFFER 

We  differ  as  to  the  relative  importance  of  the 
present  shortage  of  all  sorts  of  houses  and  the 
permanent  shortage  of  good  houses  for  working 
people.  Mr.  Murphy's  interest  focuses  on  the  former, 
Mr.  Ackerman's  and  mine  on  the  latter. 

We  differ  still  more  as  to  the  remedies  to  be  em- 
ployed. 

Mr.  Murphy,  at  the  conservative  extreme,  is, 
theoretically,  an  individualist.2  He  believes  every- 
thing will  come  right  if  Government  only  lifts  the 
brakes,  removes  the  obstacles  it  has  stupidly  placed 
in  the  way  of  building  houses,  gives  free  rein  to 
business  initiative  and  the  law  of  supply  and  de- 
mand. Practically,  he  advocates  applying  quite  as 
many  brakes  as  he  would  remove.  He  says,  to  take 
taxes  off  of  buildings,  but  to  put  them  on  land.  He 
is  willing  to  have  the  State  subsidize  the  speculative 
builder  and  landlord  in  order  to  secure  a  better  sup- 
ply of  expensive  houses,  but  he  is  sure  it  would 
destroy  the  workingman's  self-respect  if  his  city 
were  to  rent  to  him  a  comfortable  home,  as  it  sup- 
plies him  with  water — at  cost.  He  thinks  it  would 
be  dangerous  to  make  loans  from  Postal  Savings 
Deposits  to  workingman  to  enable  them  to  become 
home-owners,  but  that  it  would  be  wise  to  force 
national  banks  to  make  long-time  loans  to  specula- 
tive builders.  On  the  whole  he  is  rather  philosophic 
about  the  housing  troubles  of  the  poor  man,  and 
inclined  to  counsel  patience. 


234  THE  HOUSING  FAMINE 

Mr.  Ackerman,  on  the  other  hand,  is  so  thorough- 
going a  reformer  that  he  scorns  all  palliatives  and 
will  consider  nothing  less  than  a  complete  industrial 
revolution,  which  is  to  eliminate  profit  as  a  motive. 

WHY   WE   DIFFER 

To  Mr.  Murphy  I  say,  the  housing  situation  as  it 
existed  just  before  the  war  was  the  result  of  more 
than  a  century  of  individualism,  business  initiative, 
supply  and  demand.  The  system  has  had  its  chance 
and  has  failed — miserably,  tragically.  Never,  at  any 
time,  or  at  any  place,  has  any  population  been  satis- 
factorily housed  through  the  sole  action  of  supply 
and  demand  and  business  initiative.3 

It  sounds  plausible  to  say  that  every  man  ought 
to  be  able  to  pay  an  economic  rent  on  a  good  house 
and  that  wages  should  be  raised  till  he  can.  But 
haven't  we  had  enough  of  wages  and  prices  chasing 
each  other  up  an  ascending  spiral?  If  only  a  small 
fraction  of  the  population  were  unable  now  to  pay 
an  economic  rent,  it  would  not  look  so  hopeless.  But 
it  is  a  question  of  at  least  a  third  of  our  people — 
perhaps  more.  Any  such  general  wage  increase 
would  include  the  building  trades  and  the  building 
materials  trades.  Whereupon  building  costs  would 
rise,  and  rents  would  rise,  and  the  ratio  between 
them  would  be  the  same  as  ever. 

To  Mr.  Ackerman  I  say,  let  us  assume  for  the 
sake  of  argument  that  your  theory  is  correct,  that 
the  profit  system  is  essentially  vicious.    "What  better 


SUMMARY  AND  CONCLUSION  235 

way  can  you  suggest  of  beginning  your  reform  than 
by  cutting  out  just  one  profit  in  housing — the  last 
one — and  opening  up  the  opportunity  for  a  home 
to  a  new  group  of  wage  earners?  If  it  doesn't  open 
the  door  to  all,  push  the  process  back  farther — cut 
out  another  profit,  and  yet  another.  Each  step  would 
give  the  advocates  of  the  present  system  the  chance 
to  prove  that  its  total  elimination  is  not  necessary. 
And  if,  peradventure,  your  theory  is  wrong,  civiliza- 
tion will  not  have  been  needlessly  wrecked.  What- 
ever his  confidence  of  success,  the  wise  general 
secures  his  line  of  retreat. 

The  English  guild  movement  to  which  Mr.  Acker- 
man  refers  is  interesting,  though  to  me  it  seems 
singularly  artificial.  The  way  of  progress  does  not 
commonly  lie  in  forcing  a  river  to  run  back  towards 
its  source.  But  has  it  occurred  to  Mr.  Ackerman 
that  neither  guild  socialism,  nor  any  other  brand, 
can  conceivably  be  successful  in  the  hands  of  a  slum- 
dwelling  proletariat — physically,  mentally,  morally 
stunted  and  warped  by  the  darkness  and  the  disease 
germs  among  which  they  live  ?  That  the  destruction 
of  slums  and  the  building  up  of  sane,  sound,  intel- 
ligent masses  is  a  necessary  preliminary? 

OBJECTIONS  TO  MY  PROGRAMME 

I  leave  it  to  the  candid  reader  whether  my  pro- 
gramme is  not  the  only  practical  and  adequate  one 
submitted.  I  ask  also  whether  any  valid  objections 
have  been  offered  to  it? 


236  THE  HOUSING  FAMINE 

Are  not  Mr.  Ackerman's  objections  founded  on 
his  devotion  to  an  impossible  Utopia?  Has  he  an- 
swered any  of  my  queries  as  to  Jtow  his  Utopia  is 
to  be  brought  about? 

Are  not  Mr.  Murphy's  objections  based  on  pre- 
judice and  insufficient  acquaintance  with  the  history 
of  the  measures  I  am  advocating?  Has  he  replied 
to  any  of  my  challenges  to  quote  specific  instances 
of  "failure"  or  " scandal' '  in  state  housing  and 
state  loans? 

AMERICAN   PEOPLE    NEITHER    REVOLUTIONISTS  NOR 
REACTIONARIES 

If  I  know  my  fellow-countrymen,  they  would  snow 
under  Mr.  Ackerman's  proposal  if  it  were  submitted 
to  a  referendum  vote,  and  they  would  fight  to  the 
last  ditch  rather  than  have  it  imposed  on  them  by 
force.  With  the  ghastly  example  of  Russia  before 
us,  we  are  not  likely  to  scrap  our  present  civilization 
in  the  vague  hope  of  constructing  a  better  one  on 
its  ruins. 

On  the  other  hand,  the  typical  American  is  cer- 
tainly not  a  reactionary.  He  is  not  prejudiced 
against  a  measure  because  it  is  new  to  him.  He 
believes  in  orderly  progress,  and  progress  involves 
change.  He  believes  in  the  square  deal  and  in 
equality  of  opportunity  for  the  children  of  rich  and 
poor.  Few  would  choose  to  perpetuate  slums  and 
high  death  rates  if  shown  how  to  get  rid  of  them 
— especially  if  the  method  had  already  been  well 
tested  and  proved. 


SUMMARY  AND  CONCLUSION  237 

THE   FAMINE   FOR  THE   WELL-TO-DO   WILL   CURE   ITSELF 

The  housing  shortage  for  such  as  can  pay  from 
$50  to  $150  a  month  rent  can  be  trusted  to  take 
care  of  itself  without  subsidies.  In  such  a  connec- 
tion, supply  and  demand  will  really  work.  One  can 
hardly  pick  up  a  New  York  paper  without  reading 
of  some  group  of  tenants  buying  an  apartment  house. 
If  the  shortage  continues,  they  will  soon  start  co- 
operative building.  Or  they  will  move  to  the  suburbs, 
where  they  can  have  children  (not  such  a  bad  idea 
either!)  and  build  individually.  Many  are  doing  so 
already. 

THE   POOR  MAN  IS  THE   ONE   WHO   NEEDS  AID 

But  the  poor  man  is  an  orphan,  abandoned  by 
supply  and  demand,  except  as  those  step-parents 
offer  him  slum  accommodations,  which  no  one  else 
wants  and  which  he,  too,  would  decline  if  he  had 
any  choice.  He  cannot  build  or  buy.  He  has  neither 
the  cash  nor  the  credit. 

THE  FUNCTION  OF  GOVERNMENT 

In  a  democracy,  government  action  is  the  action 
of  the  people  collectively.  They  do  collectively  the 
things  they  cannot  do,  or  cannot  do  so  well,  individ- 
ually. Our  complex  modern  life  has  greatly  in- 
creased the  number  of  such  things.  Water,  light, 
roads,  schools,  mails,  once  belonged  to  the  domain 
of  private  initiative.  Individualists,  like  Mr.  Murphy 


238  THE  HOUSING  FAMINE 

have  cried  disaster  at  each  step ;  but  still  the  process 
continues,  and  the  disaster  has  failed  to  materialize. 
Shelter  is  a  necessity,  but  a  man  can  no  longer 
go  into  the  woods,  cut  down  trees  and  build  his 
family  a  log  cabin.  And  business  initiative  does  not 
provide  for  the  workingman.  Slums  injure  the 
health  of  those  who  live  in  them,  and  spread  con- 
tagion to  the  rest  of  the  community.  So  we  must 
have  a  remedy — practical,  safe  and  progressive. 

PROGRAMME   OF   STATE   ACTION 

Therefore  I  advocate : 

1.  The  immediate  appointment  of  national,  state 

and  local  housing  commissions  to  study  the 
subject,  which  even  yet  is  not  widely  enough 
understood. 

2.  Long-time  housing  loans  to  workingmen  at  low 

interest  rates  under  the  auspices  of  federal 
and  state  governments.  Nearly  every  civi- 
lized government  in  the  world,  except  ours, 
already  holds  out  this  helping  hand  to  its 
workers. 

3.  Municipal  housing  at  cost  for  lower-paid  wage 

earners,  and  slum  clearance  where  necessary. 
British  and  German  experience,  especially, 
show  both  are  feasible. 

As  Lloyd  George  said  in  urging  before  Parliament 
the  enactment  of  the  present  British  housing  law, 
which  is  to  provide  something  like  half  a  million 
working  class  cottages,  partly  at  government  ex- 


SUMMARY  AND  CONCLUSION  239 

pense:  "You  cannot  maintain  an  A-l  empire  on  a 
C-3  population.' '    Nor,  by  implication,  can  you  raise 
an  A-l  population  in  C-3  houses. 
Is  the  C-3  rating  going  to  be  good  enough  for  us? 

xThe  reason  for  my  tentative  form  of  assertion  may  be  de- 
duced by  comparing  the  following : 

From  Mr.  Murphy's  second  rebuttal:  "  It  is  not  in  accord  with 
the  facts  to  state  that  there  have  been  no  private  ventures  in  the 
field  of  providing  homes  for  low-paid  wage  earners." 

From  his  third  reply:  "  There  has  been  little,  if  any,  capital 
put  into  cheap  apartment  construction  for  a  number  of  years." 

From  Mr.  Murphy's  fourth  topic:  speaking  of  tax  exemptions 
on  new  dwellings:  "  It  would,  to  all  intents  and  purposes,  be  a 
subsidy." 

From  his  fourth  rebuttal  (referring  to  the  same  matter) :  "I 
pointed  out  wherein  my  plan  differs  from  a  subsidy." 

From  Mr.  Ackerman's  second  topic:  "If  any  appreciable 
volume  of  such  public  credit  be  used  .  .  .  private  enterprise 
would  ultimately  be  forced  to  withdraw  from  this  field  of  action." 

From  his  third  topic:  "Adequate  homes  cannot  be  built  and 
operated  for  a  rent  which  the  lower-paid  wage  worker  can  pay." 

2 1  do  not  wonder  that  Mr.  Murphy  does  not  want  to  be  classed 
with  the  Manchester  school  of  economists,  but  it  only  goes  to  show 
how  impossible  it  is  for  one,  who  like  Mr.  Murphy,  possesses  a 
social  conscience,  to  be  a  consistent  individualist. 

3  See  U.  S.  Bureau  of  Labor  Statistics  Bulletin  158,  p.  9,  and 
First  Report  Massachusetts  Homestead  Commission  (Jan.,  1913), 
p.  6. 


240  THE  HOUSING  FAMINE 


SUMMARY   AND   CONCLUSION 

By  Frederick  L.  Ackerman 

Little  to  agree  to.  Specific  suggestions  of  op- 
ponents avoid  main  issue.  My  purpose  to  discover 
cause  before  suggesting  remedy.  Real  production 
can  only  follow  real  effort.  "How  to  end  it"  hangs 
on  attitude  toward  profit. 

Mr.  Murphy  advocates  leaving  things  alone;  but 
he  wants  Government  "to  get  out  of  the  way."  He 
would  retain  financial  business  control  of  production 
and  our  system  of  competitive  selling.  But  his 
specific  suggestions,  with  the  exception  of  tariff  revi- 
sion, are  in  plain  contradiction  to  his  main  arguments 
as  noted  above.  He  advocates  differentials  of  one 
sort  or  another  which  are  found,  when  they  are 
tracked  home,  to  be  subventions. 

Mrs.  Wood  advocates  the  creation  of  federal,  state 
and  local  housing  boards,  the  use  of  state  credit  and 
municipal  housing.  "With  the  exception  of  the  crea- 
tion of  the  bureaus,  her  suggestions  are  out  and  out 
subventions. 

LITTLE  TO  AGREE  TO 

Of  the  several  measures  advocated  by  my  opponents, 
there  are  but  two  with  which  I  am  in  agreement. 


SUMMARY  AND  CONCLUSION  241 

I  agree  as  to  tariff  revision;  and  of  course  I  agree 
with  Mrs.  Wood  with  respect  to  the  value  of  gather- 
ing information  and  knowledge  having  to  do  with 
housing  and  town  planning.  I  would  make  this 
reservation,  however,  with  respect  to  the  latter. 
Housing  bureaus  attempting  to  deal  with  the  prob- 
lem by  the  shifting  about  of  loan  credit,  etc.,  could 
accomplish  nothing  of  permanent  value. 

My  purpose  has  been  to  disclose  why  it  is  that 
we  are  confronted  with  a  constant  drift  of  population 
into  industrial  centers;  why  we  have  slums  and  an 
ever  accumulating  shortage  of  houses. 

I  stated  that  congestion  of  population  follows  upon 
a  concentration  of  industry ;  and  that  concentration 
of  industry  is  consequent  upon  the  concentration  of 
wealth  (economic  power)  in  the  hands  of  individuals. 
My  argument  that  the  only  way  to  arrest  the  drift 
of  population  into  industrial  centers  was  to  effect 
a  redistribution  of  wealth  has  not  been  denied  by 
my  opponents. 

I  stated  that  slums  and  the  constantly  accumulat- 
ing shortage  of  houses  is  consequent  upon  a  system 
of  production  and  distribution  which,  through  com- 
petitive selling,  must  resort  to  curtailment  or  sabot- 
age in  order  to  show  profit  in  terms  of  price.  My 
opponents  have  neither  denied  these  statements  nor 
have  they  summoned  arguments  to  demonstrate  that 
any  of  their  proposals  would  so  operate  as  to  make 
any  material  difference  with  respect  to  these  two 
major  matters  which  I  maintain  constitute  the  core 
of  the  problem. 


242  THE  HOUSING  FAMINE 


WHY  AVOID   CAUSES? 

My  opponents  have  avoided  this  economic  analysis 
of  the  problem.  They  have  confined  themselves  to 
merely  asking,  e.g.,  how  investment  for  a  profit  could 
be  disallowed.  I  have  assumed  that  such  constitu- 
tional changes  as  Mrs.  Wood  requires  in  order  to 
carry  her  programme  into  action  would  be  made  when 
people  came  to  view  such  changes  as  desirable.  Pre- 
cisely the  same  holds  with  respect  to  that  phase 
of  my  argument  which  has  to  do  with  property 
rights.  When  a  sufficiently  large  number  come  to 
so  view  investment  for  a  profit — the  legal  right  to 
get  something  for  nothing — as  so  operating  as  to 
cancel  their  effort,  laws  relating  to  property  rights 
will  no  doubt  be  changed.    So  runs  history. 


DECISION  NOT  A  MATTER  OF  POLITICAL  ACTION 

How  to  shift  the  control  over  industry  from  the 
field  of  financial  business  to  that  of  technology  is  a 
matter  which  will  be  decided  when  a  sufficient  num- 
ber of  people  shall  have  discovered  that  our  system 
of  loan  credit  and  banking  (which  now  controls  in- 
dustry) inevitably  results  in  waste,  curtailment  and 
constant  inflation — that  this  system  operates  against 
the  production  of  commodities  most  urgently  needed 
by  those  engaged  in  real  production — when  this  be- 
comes a  little  more  clearly  understood  by  a  little 
larger  group,  the  control  over  industrial  processes 


SUMMARY  AND  CONCLUSION  243 

will  no  doubt  shift.  This  is  not  a  matter  to  be 
disposed  of  by  political  action;  forces  arising  out 
of  a  conviction  that  a  change  is  due  will  take  care 
of  the  matter.    Again  so  runs  history. 


It  has  been  repeatedly  asserted  in  the  course  of 
their  argument  that  a  reorganization  of  industry  was 
not  a  "practical"  matter  to  consider.  But  it  has  not 
been  shown  that  the  adoption  of  the  subventions 
which  my  opponents  advocate  would  in  any  way 
affect  the  further  concentration  of  wealth  (economic 
power) — hence  of  industry — hence,  of  population. 

Nor  have  they  shown  that  their  suggestions  would 
diminish  the  losses,  wastes,  curtailments  or  sabotage, 
which,  as  I  have  shown,  are  consequent  upon  our 
system  of  competitive  selling.  They  have  not  shown 
that  the  adoption  of  their  suggestions  would  result 
in  a  reduction  of  the  discrepancy  which  obtains  as 
between  materials  needed  and  materials  produced. 
They  have  not  shown  that  their  suggestions  would 
make  any  change  in  industrial  relations  as  between 
employer  and  employee.  Their  arguments  are  com- 
pletely beside  the  point  as  regards  these  vitally  im- 
portant matters.  This  assessment  of  their  argument 
does  not  hang  upon  economic  theory.  An  inquiry 
into  the  situation  in  Europe  in  pre-war  days  dis- 
closes that  the  system  of  subventions  such  as  Mrs. 
Wood  advocates  had  failed  to  arrest  the  drift  toward 
concentration  of  wealth  and  industrial  population ; 


244  THE  HOUSING  FAMINE 

it  had  no  effect  upon  the  general  industrial  situation 
and  the  discrepancy  above  referred  to  was  increasing. 
We  are  confronted  with  the  stubborn  fact,  which 
my  opponents  have  not  denied,  that  the  modern 
financial  system  can  not  function  except  through  a 
constant  curtailment  of  production — without  the 
production  of  waste  and  rendering  of  socially  useless 
services.  Hence  I  came  to  the  conclusion  that  in 
point  of  "practical"  value,  the  disallowance  of  that 
Eight  which  invites  individuals  to  legally  acquire 
wealth  and  power  without  rendering  any  service 
whatsoever,  is  to  be  accorded  first  place. 


Of  course,  the  advocacy  of  any  action  which  car- 
ries the  suggestion  that  it  will  make  for  the  common 
welfare  is  likely  to  be  viewed  with  favor.  But  we 
lose  sight  of  the  condition  that  under  the  rules  of 
financial  business  the  common  welfare  is  a  matter 
to  be  viewed  with  favor  only  when  action  toward 
that  end  can  certainly  show  a  profit  in  terms  of 
price.  Thus  we  cut  away  the  foundation  of  our 
good  intentioned  effort  as  rapidly  as  we  advance 
with  it. 

Headlines  in  our  serious  morning  papers  explain 
to  us  now  and  again  that  "sustained  supply  of  cotton 
hangs  on  price."  And  quite  as  seriously  we  ration- 
alize the  matter  and  say  of  course  the  supply  of 
clothing — of  food — of  shelter  hangs  on  price.  And 
we  go  off  to  "business"  and  all  day  long  we  occupy 


SUMMARY  AND  CONCLUSION  245 

ourselves  in  seeing  to  it  that  whatever  product  we 
may  be  "interested' '  in  shall  be  so  " controlled' ' 
in  volume  as  to  keep  the  price  up.  "Too  much  milk 
to  sell"  is  in  the  eyes  of  modern  business  enterprise, 
always  assessing  results  in  terms  of  profit  and  in 
terms  of  price,  a  far  more  serious  matter  than  "not 
enough  to  drink." 

Of  course,  we  go  short  of  the  necessities ;  it  cannot 
possibly  be  otherwise.  For  if  it  were  possible  through 
subventions  (which  I  deny)  to  overcome  the  dis- 
crepancy our  whole  system  of  loan  credit  and  invest- 
ment for  profit  would  go  by  the  boards.  Financial 
business  may  exist  and  continue  only  by  creating 
and  maintaining  a  discrepancy. 

The  result  of  maintaining  this  discrepancy  is  finan- 
cial profit;  hence  a  concentration  of  wealth  in  the 
hands  of  individuals;  hence  as  I  have  shown,  in 
the  concentration  of  industry;  hence  of  population. 

Our  problem  (congestion,  slums,  shortage)  resolves 
itself  into  that  of  setting  events  in  motion  toward 
the  redistribution  of  wealth.  It  is  not  to  be  assumed 
that  this  may  be  done  in  a  moment.  But  it  is  utterly 
futile  to  assume  that  our  aims  may  be  achieved  so 
long  as  we  recognize  and  maintain  that  individuals 
possess  a  right  to  acquire  wealth  without  performing 
any  service. 


HOW  LONG  WE   MUST  WAIT 

Under  present  conditions — with  our  attitude  to- 
ward maintaining  the  right  to  exploit — how  to  arrest 


246  THE  HOUSING  FAMINE 

the  drift  of  population  into  industrial  centers ;  how 
to  arrest  the  building  of  slums;  how  to  end  the 
housing  famine  must  remain  a  riddle.  And  it  will 
remain  an  unanswered  riddle  just  so  long  as  the 
legal  right  to  acquire  wealth,  without  rendering 
service  in  return — the  right  to  profiteer  and  exploit 
stands  firm. 


THE  END 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 
BERKELEY 

Return  to  desk  from  which  borrowed. 
This  book  is  DUE  on  the  last  date  stamped  below. 


yuN  21  19a 

7Dec'58DFg 

6Way'60JC 
r?ECO  LD 
MAY  6     1960 


25May'64LM 

OCT  3  0  1965  79 
IN  STACKS 


CIRC! 


OCT  16 1965      APR  2  b  1992 


REC'D  LD 
FEB   5'66-3Pf 


MAY  2  6  «gQ 

\UOT 


JUN 171993 

JBCCiRC  MAY  07 '93 


LD  21-100m-9,*47(A5702sl6)476 


ID    ^OtSCSfcS 


CQ0bDt,SaS3 


^  !2I6: 


f  IVERSITY  OF  CALIFORNIA  LIBRARY 


